People insist on using it not because it has a good user experience, but because of content. It has a terrible user experience. Don't confuse the two things.
For instance, many payroll companies have truly awful sites, yet people use them since they have no other choice.
As a specific example, searching for an apartment should not mean reading every single listing in order to discern where the property is, what features are available, and what conditions apply. That people post the same listing repeatedly until it is rented is not helping matters.
eBay, which is arguably still quite primitive, has much better filtering options, alerts, and a single listing that persists until the auction is completed. Craiglist is a series of random, repetitive posts with only a minimum of categorization.
Padmapper provided a superior way to navigate listing data and present it in a much more meaningful presentation. Being able to "favorite" listings helps when filtering.
I'd be interested to see interaction studies in the non-tech community about Craigslist, because I haven't seen a person in non-tech find difficulty in posting on Craigslist.
Also, don't confuse my opinions about Craigslist's design/UX with an opinion on the case. I've used Padmapper extensively. While I believe that Craigslist has a right to do what they please with their content, I don't see what Padmapper was doing as wholly legally wrong.
Craiglist has a great UX for a classifieds board: location > type of listing > listings by date.
It may look butt ugly, but it is as close to a functionally efficient classifieds board as you can get. Craigslist isn't trying to be anything more than that.
For many classified ads, this is true. However, for most people "location" being defined on a city-wide (or for some rural areas) state-wide basis is nowhere near an effective location filter for apartment/housing. Most people I know have a fairly short list of neighborhoods/locations that they want to live, and it's a huge pain to find those postings in craigslist's interface.
This doesn't mean that PadMapper is right, from a legal standpoint, but I think it's fair to say that craigslist's UX is terrible, for apartment/house searches (where small variations in location matter a LOT) at least.
If a lot of people INSIST on using it, then that means it has good UX. Complaints with their UX should be qualified.