@Anand191 Look at the title of your post - "Never Use Airbnb" etc... it sounds like you feel that because you had one bad experience with one host, nobody else should ever book with any of the millions of others. A little dramatic, don't you think?
You mention that the listing only had two reviews, both one-liners. Now if you know yourself to be somewhat risk-averse, why did you choose that listing instead of one of the many out there with lots of descriptive reviews and established reputations? And if you know yourself to be unable to sleep in a shared room, why did you even consider a place that is clearly advertised as a hostel for your re-booking? Could it be that perhaps Dubai was the wrong destination for your budget?
By no means am I defending a bad host who failed to honor your agreement, but if you want the best results in any marketplace it really helps to be more thoughtful about your choices as a customer.
You ask why people use Airbnb despite the risks and the negatives. I can only speak for myself here, but when I'm planning a trip I tend to consider options from several listing sites, and Airbnb is often where I find the most appealing place. At their best, they offer an interesting window into the local way of life, a chance to stay in interesting neighborhoods instead of tourist ghettos, amenities that hotel rooms don't have such as kitchens, and some unique personalized hospitality. What I don't do is assume that just because a listing is on Airbnb it's going to be good. I use search filters, I look carefully at the photos, I read the reviews - I put the extra research time in to get the place that's the best fit. I've stayed in dozens of places now, and while not all of them were 100% perfect, they were all positive experiences and their character added something special to the trip.
I have no fixed attachment or loyalty to Airbnb as a guest, and if I find something better on a different listing site I use that. But even when something goes wrong like a host cancellation or poor communication from customer service, the positives outweigh the negatives for me.
You might have a different style of traveling, and it really does sound like you would be better suited to hotels. Of course, there are millions of nightmare hotel stories out there too, so it's still worth doing your research and having a realistic budget for your needs.