As someone who used to sell on Etsy, drop shippers pushed artists off well before ai was a thing.

I used to sell hand made fine silver (99.9% pure silver) chains, but there's no way to compete with the drop shipping behemoths selling "genuine 18 karat gold" for $30. Every category, and every tag was flooded with pages of them before you got to any real products. Search for any of them on Ali express and you find identical listings for $1.

Some of them were so big they had teams of employees. And Etsy celebrated them, posting articles and interviews, pushing them to the top of the website and saying "look how successful you can be with Etsy!" Was literally the pyramid scheme strategy of showing one successful seller to convince you to sign up, but that seller has the category locked down. Meanwhile Etsy still makes some money off of you for being signed up.

The chains I made cost ~$200 just in materials plus around 8 hours of labour. And this is back when silver was $30/ounce. It's currently $89. (both in Aussie dollars). It was just me, in my spare time, in my spare bedroom making stuff, because I enjoyed it and people covered the cost and enjoyed the chains. I did well for a while, until I did well for them to notice and start selling close enough items to push mine down a few pages with SEO. I ended up making myself some stuff with the rest of my stock then just shut shop. Haven't taken the tools out of their boxes again since.

Ai is just the final nail in the coffin for Etsy's credibility.