Lack of true rental insurance makes me a little weary. Unless these people have credit cards with insane credit limits I could see this being a problem. I can see it working for smaller items though. The required insurance from ShareGrid is what makes me trust it.
I disagree with the brick and mortar rental houses being a thing of the past. Rental houses are usually way easier to deal with and will sub-rent items they don't have in stock for you so you don't have to run all over town to prep for a shoot. Not only that but they have the inventory and contacts to be able to get you new equipment incase something breaks down ASAP which is worth the premium if its a big shoot.
While it does sound ridiculous to have so many dealers in one area, I have had nothing but bad experiences with some of those dealers so I'd gladly just do business directly with the manufacturer.