This is because landlords can't break even like hotels. It is very expensive to maintain an apartment unlike a hotel room (which can be done at scale). Because of this, AirBnb will always be an inferior experience. AirBnb was never better, it was cheaper (much cheaper) which is why people liked it. (also you shared/stayed at someone's place, so if you need some social aspect it was a good idea).

Of course, in any market there are "entrepreneurs" who try to make a buck. They usually rent the place long-term and try to arbitrage through short rentals on AirBnb. The math mostly doesn't work unless your region becomes "hot" for the season and everyone wants to be there.

Airbnb will continue to exist though (and maybe grow?). The market is massive.