It's not about consumer protection. That's just a smoke screen. It's entirely about government revenue. Municipal taxes, sales taxes and government fees. Hotels and taxis and the like have to pay them and AirBnB and private rental models typically don't. By disrupting these models, these new services cut off revenues to cities and make it harder to justify the high taxes they milk the traditional businesses and tourists for. And cities are broke these days. And guess what, local voters also love (whether they realize it or not) the idea of raising taxes on out-of-towners instead of themselves whenever possible.
1) Most people live in apartments, therefore a person who is an approved tenant is now inviting an un-approved tenant to take there place, giving them access to the building and common areas.
2) More importantly most NYC apartment buildings are co-ops and not condos. They are usually selective about owners and have appropriate sublet policy. Most Air BnB type sites would violate the sublet agreements in co-ops.
There need to be some protection for those that live in apartment buildings and don't share the same feelings about short-term sublets.
What you are talking about are private contracts - breach of contract is not a crime. The article is about the government persecuting AirBnB renters as criminals, and specifically refers to the protagonist as a homeowner.
