i don't think it looks fine. i run the etsy mini as the "default ad" on AVC. i rarely see it but i suspect it is seen by a lot of people outside of the US. out of curiosity, are you outside the US?
I assumed you thought it looked okay from how it was on your blog, as personally, I would have said "hmm, it doesn't fit". At this point in the story, I would go to the Etsy App Gallery and see if a helpful third party developer had one in a smaller size. On the other hand, if I was on the Board of Etsy, I'd probably get on Etsy IRC instead and tell one of the 70+ engineers there to make me one that fits.
If only every browser supported the 'zoom' CSS property, we could just apply zoom:80%. Then this one would fit fine... alas. Next we ponder what happened to the 'Super Etsy Mini', which died in creation with only the epitaph: "It was trying to do too much".
It's cool you're showing your Etsy stuff on your blog. There's still a huge mass of people who don't know about what is found on Etsy.
(The Etsy iframe that's being served is 368px wide, but your sidebar only has 300px available.)