The notion that one cannot protect one’s property with deadly force, if necessary, essentially means that the entire concept of property ownership is a farce. It means that if a man with a knife demands my car, even though I am armed with a firearm, I must allow him to take my vehicle. Even worse is the enshrinement of state-ordered cowardice inherent in the notion that you have a “duty” to retreat from “situations that might escalate into using deadly force.” This places the balance of social power entirely in the hands of any lawless desperado willing to threaten to use deadly force.
I’m not convinced that it’s that bad. As I see it, if your thug shows you a knife with the implied threat to use it, he has already escalated to deadly force; if I’m wrong on that point, then your showing a gun is not deadly force either. Either way, you’re not obligated to assume that he’ll put his knife away if you give in.
Disclaimer: That’s logic, but I can’t promise that it is law!