I'm married to a Realtor, so I've had plenty of direct access to the local MLS system, and also I've overheard many conversations between my wife and her clients about Zillow.

From what I've seen and heard, Zillow's data isn't just delayed by a week; it can be years out of date, and grossly inaccurate as well. Both buyers and sellers are very mislead about property values based on Zillow because they see the last sale price and Zillow's estimate of the current value. Zillow has no idea about the local market conditions though, so it can over or under estimate the current value by a huge percentage.

Zillow also uses property tax valuations. The towns in and around my area have gone through a couple of re-evaluations in the past five years, and one thing I've learned is that the local governments value houses quite a bit below market value, for political reasons: owners can appeal the valuation, but only if the valuation is some percentage over market value. So instead they consistently value the houses below market value, and charge a higher tax rate to keep the revenue the same. Most people think they're getting away with something because the valuation is lower than they believe their house is worth, and the handful of people who realize what's going on can't do anything because they don't meet the qualifications for appealing.

Anyway, Zillow uses those low valuations as part of their estimate, so buyers coming into the area who are using Zillow instead of a Realtor have no idea how much houses are actually worth around here, and they waste everyone's time arguing about prices and by making low-ball offers that have no chance of being accepted. Realtors hate having their time wasted, because they work on pure commission. So they hate Zillow.

As far as Realtors wanting to keep MLS data to themselves so they don't go the way of travel agents, I think it's more complex than that. For one thing, it's the MLS people that are keeping the data secret, not the Realtors. The Realtors have to pay for access to MLS, which would stop if the MLS data were public. That could put a lot of money back into Realtor's pockets. This is significant, because it's up-front money: the Realtor has to pay for MLS whether they have any closings and earn any commissions or not. It's a fixed cost of business, which hurts when you don't have any guaranteed income.

Also, Realtors bring a lot more value to the game than travel agents did, at least since the early days of the travel industry. Realtors aren't just facilitating searching the MLS; they're managing the entire multi-month process of buying or selling a home. On the buying side that includes locating suitable areas, managing access to properties for viewing, advising on property value and market conditions, negotiating the offer, helping with inspections, helping to navigate the pitfalls between attorney review and closing (often including helping with a mortgage), and being there with you at the closing. On the selling side there's most of that, plus getting the house prepared for sale, taking good photographs and writing the advertising, holding open houses including the critical Realtor-only open house that shows all of the other Realtors (and, by proxy, all of their clients) your home, and helping you to deal with inspection issues that come up and your final move-out.

It's a harsh business to be in, with a huge amount of work for a paycheck that may or may not ever come, and opportunity costs from clients you can't work with when you're tied up managing the deals that your existing clients are working through. Making the MLS data public wouldn't change any of that; instead it would mislead buyers and sellers into thinking they can do it on their own, with no idea about the quagmire they're walking into.

Let me put it another way: if you're sued, or put on trial for a crime, you have every right to represent yourself in court. But that's almost always a really bad idea because you're not a professional lawyer, and when you're in court you want someone who does this kind of thing for a living, instead of someone (you) who's never/rarely done it before.