Disclaimer: I worked at Etsy, a long time ago.
> The next group, headed by Chad Dickerson and Allspaw, seemed like they wanted to focus on technology for technology’s sake, more than what Etsy was actually doing with that as a company.
I think you're missing quite a bit of this story. I was around during the transition of Chad from CTO -> CEO, and the truth is that Etsy needed to focus on the technology badly during that time. The site would go down constantly. We had very little insight into what was going on with sellers or buyers. Every busy day was basically us crossing our fingers that the site wouldn't go down.
We needed someone focused heavily on the technology. We could never have continued on that path and grown as much as we did.
> Etsy should be focused on one thing: connecting buyers and sellers of handmade art with each other.
Deciding what potential buyers are interested in and what items to display to them is a pretty difficult technology problem.
Detecting mass-produced goods in a way that's more subtle than "ban all Chinese sellers" is a pretty difficult technology problem.
If anything I would argue that Etsy didn't focus nearly enough on that, and focused way too much on "low-hanging fruit" (minor workflow adjustments for sellers and buyers).