Etsy can and will shut your store down with or without a good reason. Yes Etsy will let the resellers stay and close down small shops that are either too vocal or if there is any question at all about what you make.
It can happen to any of us at any time.
Etsy's recent actions have proven that they do not care about the small shops on their site. The Etsy resellers make them much more money than our little truly handmade shops. It will never change. I was just reading about an Etsy seller that spent two years promoting her shop on Etsy and was suddenly shut down. She had never bought a domain or promoted herself only Etsy. Scarey stuff.
If she had just used Etsy as a promotion tool and did more marketing promoting her own website she would not have had a total loss of income and the ensuing panic over having her store shutdown.
STOP promoting Etsy and get back to promoting YOUR business. Every shop on Etsy should have their own domain name and website. Even if you cannot afford to get a shopping cart right now, at least get the domain name and make a holding page with your business name, some pictures and a contact us paragraph. Or buy a domain name and at least make a blog with it.
I really feel bad for people posting on the Etsy forums about the Ecologia/Bali/All from boats fiasco. What a waste of time and energy. I get that everyone is upset but again you will never be able to change Etsy. You can only change yourself and the decisions you make.
I really wish I had the money to start the ultimate handmade website. It is ridiculous that Etsy has sales in the millions per day (and gets a good chunk of that) yet has zero customer service for the sellers they make their money off of, no phone number and a whopping 16 employees to check for resellers.