Seth, I very much agree with your pros and cons.
It’s so interesting to read these very different perspectives from people who’ve seen the market change over decades. I am very involved with Etsy. I was a member of their 2016 Seller Advisory Board, have been on the board of directors of the NYC Etsy “Team” (an independent non-profit business group, working often with Etsy staff), have done some small biz government work with them in Washington DC, taught for their Craft Entrepreneurship Program, and have contributed to videos/podcasts/workshops they produce.
All that said- I don’t think Etsy is the greatest thing ever. It’s just a venue where you can sell, but you really have to stay on top of their technology and search algorithm changes in order to surface in the mountains product. There is seemingly a never-ending line of new shops opening every day, from very high to very low quality. Especially with the explosion of affordable 3D printing and laser cutting.
I’ve been selling on Etsy since 2008. It used to be pretty great; people came to buy something hand-crafted and unique, and Etsy was a place to see trends starting that later wound up in the mass market. But the terms to sell on it opened up a lot over the years, so now there is a lot of competition with mass-produced items and huge downward price pressure. “Free” shipping is pushed. And there are a lot of very good jewelers out there who have a day job (or well-employed spouse) and do this as a fun hobby, which is an issue when considering prices.
If you make a niche product- you can still stand out on the platform. I do well, but I have a hyper-targeted market and generally sell reproducable costume to mid-range jewelry ($20 – $350. I do get custom commissions from the site too.) My friends who sell classic gemstone jewelry have to push all of their own traffic from social media and/or ads. But it can be done, especially if you only sell direct to the consumer (no wholesale). As others have said, I definitely would not recommend Etsy as a venue for fine jewelry, unless you are simply using it as an affordable e-commerce platform that you direct traffic to.