But—let's be real here, guys. Etsy exists to make money so that it can keep existing. The question of an IPO isn't an if, it's a when.
Who makes the most money for Etsy? Here's a hint: it's not me with my under $50 items of which I list, at most, 30 at a time in my shop. It's the people who list 400 items at a go, or people who sell $2000 tables (or whatever). In terms of business viability, in whose interest should Etsy be more invested? (Whether or not that answer is the same as whose interest Etsy should be more invested in from an ethical standpoint is another issue.)
That's where Etsy seems to want to go: helping and promoting the "big small" businesses: ones that can mass produce (in relatively limited quantities), have multiple employees, but aren't any kind of national brand name. That seems to be the route they're taking. From that perspective, limiting stores to selling "handmade" from the strictly true definition is just that: limiting. I do not begrudge the people with enough capital to hire a few casters or professional photographers or SEO experts or screenprinters or whatever; I do not begrudge Etsy's business-minded decision to make the website better and easier for their most productive customers.
Here's what I do mind: dishonesty.
Be honest with us (and yourself), Etsy: you are not about valuing handmade products. Startups and ingenuity, sure. But the truth is, the vast majority of "handmade" isn't done by trendy hipster designers in their Williamsburg bachelor pads. It's laid-off people who can't find other work and are desperate for any extra income, it's hobbyists who need some extra cash, it's the SAHM whose husband hasn't gotten a raise for the third year in a row despite the cost of everything else in the world steadily rising. If you don't want to help them, that's fine. The least you could do, Etsy, is be honest about it.