It's pretty easy to assert that Craigslist is somehow disrespecting their users - perhaps by having poor UI - but it's harder to prove that assertion by setting up a competing service with your idea of a "better UI" for the users.
It seems abundantly clear to me that the assertion that "A competitor to Craigslist who got $x right would easily get all Craigslist's users", for any of the usually mentioned values of $x [web design, UI, UX, customer service, search, API, other services using their API, …] - is nothing more than a head-in-the-sand misapprehension on the part of startup/web design/UI people. Craigslist _users_ have not "jumped ship" en-mass to any technically or graphically "better" alternative - and it's hardly from lack of trying by people who're _sure_ they will.
I think sometimes we need to get out of the HN/startup/bay-area echo chamber - I'm pretty sure Newmarket and his crew have a much different view of what their user base wants than any assumptions made by the HN zeitgeist…