No, actually in my experience, donation escrow is perfect. With arbitration type escrow, the buyer can choose to screw the seller and claim the item is no good, and get money back. Also, for digital goods, there's no way for seller to prove he has delivered the item. Also fraudulent sellers can just ship empty box to the buyer with tracking number to fool arbitration (I have seen this fraud on ebay/paypal many times, but ebay has a reputation system to keep this low).
Basically, if there's arbitration, there will be incentive for both buyer and seller to get creative and screw over the other guy. With donation escrow, there is no such thing. Seller has zero incentive to screw over the buyer as if the buyer is unhappy, seller does not get any money. Buyer also has zero incentive to screw over the seller, as buyer not getting money back either way, and he'd be really stupid to intentionally piss off someone that knows his name and address.
Do NOT use donation escrow services. These are the stupidest idea I've ever seen implemented in an escrow service.
Escrow is meant to protect both parties. An escrow service that protects only one party is effectively not really an escrow service, and an "escrow" service that sends the money to a "donation" in the event of a default is just asking for all sorts of trouble. I would never, ever, ever agree to a donation escrow as a buyer. Donation escrows are only harmful to the process, they do not provide any benefit. There is no risk to the scammer by using donation escrow or not using it - either way they won't get the money, but if they do use it, at the very least they can use it to fuck you so you don't get your money back in the event of a default. On top of that, they can also be used as a harassment tool even if someone isn't a scammer in the sense of them trying to take your money.
An escrow service requires an arbitration process. Any escrow service without an arbitration process is nothing more than "Hey Bob, will you hold my wad of cash for a few days?" And you don't know Bob. And Bob might give your money to the Red Cross if the seller tells him to.
As far as feedback/ratings go, there's already a site, it's called HEATWARE. I use it on here as well as other forums. It should be the standard for here, just like it is at so many other For Sale forums around the world.