To start, this could hurt the competitiveness of the products themselves. It may put off buyers with higher prices. And while a large business can take advantage of economies of scale to lower the shipping cost, that's not usually true for an individual crafter who may only sell a modest number of items. There's also the question of consistency. Shipping costs can vary even within the US, and that could leave some buyers overpaying.
And while this shouldn't affect non-US buyers for now, international audiences are a concern. It could be harder to sell goods abroad knowing that you'll have to either raise the price even higher or else accept that you'll appear lower in search results.
Etsy has claimed that this should lead to more sales overall, as people are 20 percent more likely to complete a purchase if they know shipping is already included. CEO Josh Silverman also admitted to Business Insider that this would be "a lot for sellers to absorb." For many of Etsy's sellers, though, those statements aren't enough. They're concerned they'll be marginalized, and that increased sales for some could come at their expense.