One man's treasure is another man's knitted kitten bowtie. It's difficult to do a "curated" etsy when their core offering is basically "things not mainstream enough to be mass produced."
I'm not so sure about that. Istockphoto's model for keeping crap out of their stock photo offerings seems to work pretty solidly, and at minimum some form of curation would scrape off the resellers and the kind of crap that's so popular over on regretsy.