It's really the way to go here, that's why it's so popular I bet. We've stayed in hotels in years' past, it's a totally different experience (and not in a good way). The 4x4's would be fun. We've seen tons of them around town. My wife took her Jeep up Schnelby Hill once but I wouldn't try it in anything other than a 4WD/AWD.
You're totally right. The local government gets addicted to the increased revenue from the Airbnbs but the locals are the ones feeling the squeeze.
Hope you're well. It seems like the weather is finally getting better back home, hope you're enjoying the warmer temps!