Airbnb changed their name and pivoted into the vacation rental rental space, and now shared rooms and "bed and breakfast" are a tiny fraction of their listings, but this opened up a much bigger market. IMO, this is the big lesson.
The apparent lameness of the initial niche doesn't let investors off the hook—ability to see beyond that to what a startup might grow into is a big part of being a good early investor [1]. Throw in not "missing the determination of the founders" and you may even have most of it.
By the way, Airbnb didn't seem lame to everybody. PG used to run a couple straw polls per batch asking founders who was most likely to succeed, and I recall Airbnb winning both the votes in the W09 batch by large margins.
You're mixing up the idea (which seemed lame) with the founders (who seemed great). Presumably this happened also because once you get to know people (especially within 3 months) you can make a much better judgement about their potential. The VC/pitching situation is flawed in that you usually only get < 1hr to sell your vision. VCs love to say "we back teams" which is translation for (1) founders already did something significant (2) founders came from prestigious backgrounds (3) the investors personally know and have worked previously with founders. 3 is obviously ideal, but can be rare.
Why does that matter? Because Airbnb was a fabulous investment when they got all those rejections, and that is the point of the story: getting a heap of rejections doesn't mean you're not a fabulous investment, despite the unbelievable pressure it puts on you to believe so.
It's actually sort of hard to find vacation rentals on AirBnB. There just aren't that many of them compared to VRBO and Flipkey.