IMO, the primary reasons to chase Diamond status at Hilton is:
1. Upgrades at stays (assuming the hotel has the capability to upgrade)
2. No blackout dates when booking reward travel
3. Reward travel - you use your airmiles to get somewhere free on a vacation, why not have a free hotel while there?
I've used my points for a stay at the Sedona Hilton last year (saved $1500 on room charges) and have booked a stay at the Hawaiian Waikoloa for next Xmas (6 nights for free!). Makes for nicer holidays for sure!
For me, I have to sleep somewhere while travelling on business, so where possible, I stay at the Hilton chain to maximize my points.