The whole notion that successful competition ends in destruction is pretty...wrong. This isn't a football match where team A needs to lose in order for team B to win. Competition is healthy and normal, and multiple organizations can thrive in the same space.
Networks effects suggest the market will coalesce around a single free provider of classified listings. If (when?) Craigslist goes down - it will be fast, and very, very destructive. One moment they have 99+% of the Bay Area rentals, a month or two later they'll have close to 0%.
