I wonder why AirBnB doesn't pay people Uber-style to inspect properties. $5-10 to go to an address and check that it can be accessed and matches the photos as an unannounced spot check? Send someone out on first listing, periodically, and every time a host cancels for a "maintenance issue" to verify the claim.
Verifying listings is not a hard problem, Airbnb literally just doesn't want to, it takes a "we are just a middle man, hosts are responsible for their listings" approach. This is what makes them money, I don't think an Airbnb with only verified legal listings would be very profitable.
I think it absolutely could be. As I said in a post above, I've used it once, to stay at a private home (with the family living there) when I traveled to Europe last year and the hotel rates in one particular city were absurd. It was a great experience for me, though of course staying at a private home is very different from staying in a hotel, and very limiting in some ways. For people wanting to do this, "legal" hotels just don't offer that same experience, and I think such a service can certainly be profitable.
However, it's not going to be mega-profitable like Uber or any other well-known tech companies with giant IPOs and huge valuations. And this I think is the problem: greed. Why can't the owners just be happy with something that makes a tidy profit and provides a nice service to people who want a different travel experience than what you get staying in a bland hotel room?