I've personally used AirBnb when I've stayed somewhere on my own and just wanted a spare room to crash in, with the added bonus of some company, and also to rent an entire detached house in the French countryside with my family for 2 weeks.
Both of these AirBnb offered something way better than a hotel.
I do agree that that middle ground - a whole apartment in a mixed residential building - is problematic, and I'd feel awkward staying in that setting.
You make a good point - the "rent out my couch" type of thing and "rent out a whole separate house" admittedly break my argument a little bit.
However there are still the questions of things like insurance coverage and other safety related topics. Basically if anything goes wrong in a hotel, there is staff who is required to be trained to be able to deal with it. Again, the cost associated with dealing with the 0.05% corner cases is distributed to everyone in the case of a hotel room, but to the specific person to whom it happens in the airbnb case.
To be fair, if you really want to rent a whole house, the hotel industry doesn't often provide good options ....
Both of these AirBnb offered something way better than a hotel.
I do agree that that middle ground - a whole apartment in a mixed residential building - is problematic, and I'd feel awkward staying in that setting.