Etsy still welcomes small craft artists and makers and provides a convenient e-commerce portal for them, but yes, it's the discovery that's been ruined.

They originally broke through and defined themselves by insisting that vendors only sell original cottage-crafted work, but gave up on that requirement years ago and the sincere low-volume, low-margin crafters can't compete with high-volume, high-margin importers in either advertising spend or in the etsy-profiting metrics that drive algorithmic discovery.

Another thing that happens is your local shop will set up one Etsy store, the el cheapo junk stores may set up a huge number of different shops selling the same set of products.

This, too. Amazonification/Enshittification