I don't think Etsy is necessarily wrong overall - I think they just weren't clear in what they did or did not want in their market. I also think it was badly handled on their part - it seems like they could have communicated their concerns without making it sound like a cheap interrogation.

Lastly, from an outsider POV, Etsy doesn't really seem like the ideal place to put up a synthesizer shop anyway. If I was looking for electronics of any kind, I wouldn't be looking there (although, since I'm not really in the market for a synth right now, I'm not sure where else I'd be looking, either).