I sell on Etsy, I signed up in May and so far I've done about $1.7k in sales, so to me it's very worth it, and I'm proof that yes, people do actually sell on Etsy.
A little bit of research will help you out, there are many, many people making a full time living on Etsy, there's a weekly blog called 'Quit your Day job' which features just some of these people. There are thousands of people with thousands of sales. I'm a little late to the party, but so far I've found it very worth while. It's an iron in the fire for me as I also sell through other avenues, my own website, and other online retailers.
Saying there's a lot of cr* on there is true, but it's like saying there's a lot of cr* on Ebay, yes there is, but there's also a lot of great stuff, and people making full time livings. It's such a massive network there's every end of the spectrum included.
For me it's a great way to connect with international customers, I'm looking forward to when it really takes off in the U.K. because I definitely think it will.
Hope that helps, I'll find the link to give up your day job article, it'll give an insight.