A2A
So I've never lived in Venice, but I've been there many times. I honestly wouldn't want to live there -- while it's possibly my favorite city to visit.
(1) Venice gets very crowded. Like can't move through this dense sea of people crowded.
(2) When it doesn't rain for a while, it can smell.
(3) When it rains too much, it can flood. The city is actively sinking. Most of those beautiful palaces on the grand canal have abandoned ground floors, to just let the water flow in and out. The locals have hip/chest waders ready for the floods.
(4) All cats must be always kept indoors. The city poisons the rats. The first time that they did, basically all of the cats died eating the poisoned rodents :(
(5) Like many cities in Italy, the Italians who own homes in the historical center, mostly rent them out to tourists. This doesn't take away from the beauty of the center, but it should be noted that it's not a very authentic Italian experience.
Venice refers to both the lagoon and it's group of Islands (including Murano and Burano) as well as the main island -- also called "Venice". Something like 99% of tourists are concentrated on the part of the island of Venice between St Marc's Square and the Realto Bridge. I credit day-trip cruisers who only have a few hours to see all they can for this. You'll find plenty of tourists on the main canal/street of Murano, too.
If you move away from that St Marc's / Realto area, then the feel of the island changes very quickly to something much more authentic and Italian feeling.
Oh, and after dark, the streets that were beyond crowded in the day suddenly become completely abandoned. There are some pubs, but I wouldn't say Venice is known for it's night life.
(6) That flood of tourism will make eating well for next to nothing -- one of the best things about living in Italy -- a bit harder to do. Generally they say the cost of living is higher. I think that's true from just about any island, though.
(7) Venetians speak their own dialect. So that bit of Italian you might of picked up from your Sicilian grandmother or that class you took a while back might not be that useful.
(8) I can't imagine the people who live there getting tired of the water. The floods maybe, but not the water. I think those who have lived there for generations all keep boats (there are no cars on the island). That would make the canals like streets usable only by the locals, while the tourists all crowd the sidewalks. Having lived in the touristy part of a few cities myself, that would be awesome!
(9) My brother-in-law lives in Veneto, less than an hour from Venice. We visited him this past summer and I was amazed by all the sights to see that I had never even heard of in the area. So if you lived in Venice, you would have no shortage of day trips to take on weekends. Not to mention Venice does have an airport that can connect you easily to the rest of Europe. As well as a major train station.
(10) I'll close with the fact that Venice is really the most beautiful city that I've ever been to. Not everyone who goes has a great experience, it is easy to get turned off if you're there in rain, when it smells, or when it's shoulder-to-shoulder tourists. I've been lucky enough to mostly be there when the canal was a dazzling bright blue that complements the bright colors of the palaces. On second thought, I could live there for a little while :)
Cheers!