I think this is spot on, but it really depends on the target audience. Having a nice design will help separate you from the crowd, it could even be one of your distinguishing features.
But if you were creating a craigslist for web designers, I would strongly recommend having a nice design - know your target market :)
While you don't need to have a very flashy and attractive website, you do need a clean and usable user interface, and stuff like clean colors and typography.