If Airbnb required and stored pictures they could be used to identify them in case they trash the house.
I can't think of anything else the property owners would claim to use the profile pictures for.
I admit that I'm not familiar with the booking process on AirBNB, but I'd be really surprised to hear that a booking, once completed, can't be cancelled. Wouldn't the same people cancelling reservations now just cancel them post-booking instead?
(granted, this can still happen, legitimately, even in a post-booking display mode.. but post-booking cancellations could be a signal for flakiness and, overall, a reason to put hosts on notice that they need to shape up)
Even if they don't care about people being discriminated against they could at least think about the loss of potential customers.