Without the intention of starting a flame war, all the issues I've read so far in this thread seem to be US bound.
I've booked AirBnB's in 5 different countries (Spain mostly, but also Germany, Poland, Thailand and Argentina).
Thailand was 5 years ago, thought, so your mileage might vary nowadays.
Biggest issue we ever had - family trip, mind you - was a booking in Granada last year that was very obviously double booked (We got to it and there were suitcases and clothes everywhere).
One phone call later we were upgraded to a a better apartment in the same building, and the host apologized profusely.
We (GF and I) are AirBnB host ourselves in Buenos Aires, and we strive to provide the best service possible.
Competition has been fierce here as well for the past 12 months or so (Even thought after a little market research I managed to maximize our returns).
Here if you don't provide a good service you're gone. There are no second chances.
Regarding the whole AirBnB matter I think also one of their biggest problems right now is that booking.com is giving them a run for their money.