I think it happened probably around 2008 with Maria and the marketing machine which focused on trends rather than the organic content that had been created by the sellers and creators on the site and the buyers that came because of it. I had high hopes for that audience and the growth of that type consumer.
Etsy mainstream marketing has funneled anything that was unique and special about the site into a red headed step sister of Amazon. (sorry redheads and step sisters..I love you!)
The Etsy emails, FP, Browse are so stale and done. (and yes you will find me in there so don't bother looking) My post is not personal or about my shop, its about diversity and the site as a whole.
From my viewpoint, Etsy has become a fashion and home decor site. To attempt to fit everything on the site into those categories is a shame. I think shoppers are smarter than that.
So I know gobs of people will disagree, some of us enjoy the giant flashy cruise liner on a path to nowhere. Others prefer the slow and steady ride of the canoe or sailboat.