I think Airbnb is a very shades-of-gray enterprise. Agreed, when you hear stories of one person or entity taking multiple apartments off the market in high-demand cities like San Francisco or New York, depriving actual residences of the cities housing, it's not so great. And not so great for the neighbors who often contend with boorish, loud tourists. If they wanted to live in a hotel, they likely would've moved into a Marriott :p
And I think for some travelers it is really a great thing. Getting to experience "living" in an area, as opposed to a sterile hotel experience. It can be awfully nice to have kitchen access and avoid restaurant food all the time. There are lots of options for singles and groups of people. For a homeowner, like your Kailua friends, having the host experience and being able to make additional money is a pretty sweet mix.
A few months ago I stay with my children and another family with kids in an Airbnb in a destination halfway between our homes. The house had a nice kitchen (we prepared all our own meals), a swimming pool, kid rooms, more grown up rooms, lots of games and books. There was Netflix but no one turned the TV on the whole visit. We realized it was the regular home of a mom with kids; they simply move out for a week or weekend when there are guests. Boyfriend? Family? Cheap motel? Who knows. But it probably helps her stay in her house, so it's pretty hard to find fault. While (I'd like to think) our group was relatively quiet and easy on the house and neighborhood, it would not be a stretch to imagine a group of loud partiers in the pool all night, or leaving a mess. People can find their way around reviews and recommendations.
It just doesn't seem like any one thing with Airbnb, like Uber. There really are plusses and minuses depending on how you're looking at it.