Etsy also allows supplies and vintage items, and those sellers tend to have more sales than the handmade artisans. Most of the money from an Etsy purchase goes to the artist, not the website. It's really more important to look at the individual account holder than to categorize all things on Etsy as bad.
Personally, I stay away from the Etsy drama. I have heard of things like people importing furniture from China and selling it on Etsy as handmade (my mom spends too much time on Regretsy), but as far as I am concerned Etsy is a selling platform and the advertising and maintenance of my shop is up to me. It remains the best location and interface for me to sell my fiber arts supplies. Instead of trying to strike down competition for a simple product, I strive to produce a unique product that has market value.
Etsy is an excellent source of traffic and a great shopping interface that I don't have to set up myself. For that alone, it is worth the minimal fees I pay.