AirBnb won't be replaced, it'll be made illegal. It's exploiting - in a significant way - something which was already illegal in a lot of places, or certainly skirting neighborhood ettiquette (i.e. not illegal, but do it enough and there'd be good reasons to make it so).
It runs the very serious risk that there'll be crackdowns in popular cities on AirBnb style subletting, and once that happens their income base is only going to go into decline from then on out.
Some of it is, yes. It's combining a number of markets, though. The most problematic is people who are basically running classic, 1920s-flophouse-style, unlicensed and uninspected hotels in places like NYC. I would guess those will eventually be cracked down on. But there are two other big categories. The second is the "couchsurfing for money", people who really are renting out a spare couch or spare bedroom. These are also often illegal, but at least if they do it less often than "always", and fairly discreetly, are much less likely to run into trouble than the person running a full-fledged flophouse operation. The third category are people running fully licensed vacation rentals. AirBnB has somewhat accidentally captured a good portion of this market as well, in large part because its competitors in much of the world range from poor to "don't have an English website" to nonexistent. I rented a house in Crete in this category last year; it was a place that otherwise you could rent directly or via a travel agency, but I only found it via AirBnB because their internet presence apart from AirBnB was poor. I think even in the U.S., which has VRBO as the incumbent, AirBnB is picking up some of this business.
Whole apartment rentals of less than 30 days are already illegal here in NYC unless you have the proper licensing. I think only around 1% of the Airbnb whole apartment listings have said licensing. So everything else on there is an illegal temporary sublet. Note that I do have a friend who operates on Airbnb in NYC and has the proper licensing.
It runs the very serious risk that there'll be crackdowns in popular cities on AirBnb style subletting, and once that happens their income base is only going to go into decline from then on out.