Homestays are generally great:

1. interesting, respectful people / less "sterile" environments.

2. actually helpful in navigating the area.

3. broadens everybody's views (read: politics) to meet other people in person, see how they live and understand their viewpoints.

4. appliances/etc tend to work better, because they need them themselves.

I've had nothing but good and great experiences with homestays. I've also hosted which has been ok-good: 100% respectful and kind, but not always that interesting.

(I've been hosting/traveling for 15 years i.e. long before AirBnB)

Amen, the communal aspect is well worth it. Especially due to BnB's (not AirBnBs) are a bit more expensive, so the community is self selecting. You have to want to be there.

Exactly this. I'd add that homestays allow me to pay for just what I need - a comfortable/safe/private room to stay in. A lot of the extras you're paying for at a hotel are totally unnecessary for me:

-someone making the bed + tidying the room

-fancy buffet

-facilities like gym/spa/TV

-general feeling of 'luxury'

Obviously there are some people who do care about these things, but as I don't I'd rather not pay for them.

Because it's often an excellent experience and makes the vacation better. I rented out a bedroom in my 2BR apartment in NYC for several years and it was truly a wonderful experience. I had a one-week minimum and therefore hosted almost entirely tourists visiting NYC from overseas (as opposed to random people in NYC who needed a place to crash for a night).

With very very few exceptions, I met warm friendly people. They liked have a local in the same place to talk about plans and get suggestions, I liked some new faces to have coffee with in the morning. Everyone won.

Some do, some don’t. I despise having to communicate with people.

I stayed in a room in Berlin once. It was nice to get to know a local a bit and get tips on what to go see. If you want a sterile experience, book a hotel.

Hotels are often located in touristy areas and lack nice amenities like kitchens. Is it that hard to understand that there exists demand for whole-home vacation rentals?

I wasn't arguing that that demand doesn't exist; I've rented out whole houses on airbnb myself.