It's not inherently bad. Some regulations are dumb and should be challenged by the market, like Uber and Lyft did to taxi companies and the protectionist regulations that kept them from evolving and improving.

It's less about removing the review or listing and more about looking at the belief system in the business. If a local government says "this space is for permanent residents only" AirBnB would say, "why?" and would rather ignore or fight the regulation than comply (or more likely "take it up with the host, not us").

There are legitimate questions to what terms a government/HOA can force on property owners renting out their residences. From taxation to civil rights and racial equity there's a lot on the table to challenge. That said, companies can be reckless when choosing not deal with the question because it doesn't have an easy answer and grow/scale at ethics' expense.

AirBnB has actually had to deal with this, like removing the ability of hosts to see guest photos before booking because of racial discrimination, and charging the appropriate hospitality taxes on listings to comply with the vast number of of municipalities they operate in.