I don't understand the drama either, but everyone knows it isn't that easy. As has been said many times, their network effect is what matters here, not features. I use craigslist and I hate it (seriously, something about the site irks me) but I know I have no choice if I want the best chance of finding something. I used padmapper and loved it; it was a better service.
For a good example of how strong network effects play into things, look at Google+. Seriously, if Google couldn't kill Facebook by building a better service (IMO), how do you expect a company with exactly 0 existing users to usurp CL?
TBH I don't have a good solution because I don't think regulation is the answer here. Up until about today I would have said the best value add for a service is to start by targeting sellers, and grow the buyer market later (e.g. use service X to post ads to CL, <other marketplace>, etc)
For a good example of how strong network effects play into things, look at Google+. Seriously, if Google couldn't kill Facebook by building a better service (IMO), how do you expect a company with exactly 0 existing users to usurp CL?
TBH I don't have a good solution because I don't think regulation is the answer here. Up until about today I would have said the best value add for a service is to start by targeting sellers, and grow the buyer market later (e.g. use service X to post ads to CL, <other marketplace>, etc)