Barely any sellers are profitable on etsy. They're all housewives or hipsters that sell at amazingly low profit margins. It's a steal if you want to buy handmade stuff though.
Then, there are sellers that are based outside the US with far different production economics.
And of course, there are the deluded sellers who are trying to be profitable and can't get there.
I hope they can find a way to pool the cost of materials to bring low cost overhead to sellers. That would make the industry explode.