Our business sells on Etsy since 2009 and Handmade at Amazon from beta. I will tell you the difference from the field. First, Mr. Silverman is doing a magnificent job turning Etsy around. Second, my experience comes from the 3% that is not work from home makers. In other words, you can buy 1,000 of something from us. This type of business model on Etsy makes selling via Amazon Prime part of the equation, which we do.
The shopper on Etsy is loyal and passionate. It is easy for the Etsy seller to establish a relationship with the buyer because of the "storefront" and the conversation system. The Etsy messaging is superior to anything out there. We will not provide customization on Amazon and buyers don't want a relationship. You can build a brand on Etsy, Amazon is simply a transaction. Amazon will not, because they should not, create the kind of experience for customer service, curation and messaging that a marketplace like Etsy masters.
My last pont is wholesale. Etsy will not talk about this much because they are focused on fixing the core business as they should. We sell on Etsy Wholesale. There is a growing group of retailers who go to the trade shows and end up on Etsy (and Indigo Fair now and maybe Hubba soon) to find something different. This is significant for any small batch maker building a brand. Sure, Amazon could buy one of these marketplaces as a silent owner, otherwise this is how Etsy stays relevant.