You can see that with AirBnB, which I think is based on a good idea, but also utterly fails to deal with many of the actually hard problems in the space—those that involve things other than operating a website. Real-world problems led to hotels being regulated in the first place, such as health/safety and noise problems, and so far AirBnB hasn't done much to convince me that they even understand the problems in that space, let alone how to address them.
It may not be the most efficient system in the world, and there are definitely casualties along the way, but it does seem to work more often than other approaches (at least that I'm aware of... would love to know about other approaches that have a similar/higher success ratio).