It's a test. You can find a thread about it in the Bugs forum.
I now have 40 items per page, a friend in another team now has 80 items per page.
I wonder how Etsy considers these things tests when
a. we have not been informed (this is MY shop they are messing with...);
b. they don't ask us for our opinion (how do they get test results?).
It's more like a rat lab, I guess.
Ow, and Etsy in case you DO want my opinion: I love it! Honestly.
Less pages and more chances of items being seen.