I don't think the AA Hotels/Car Rentals is such a bad deal- in general, the redemptions seem to be over 1 cent per mile, which is higher than most hotel/car portals (at least United/Delta).

I wrote a blog post on the program and in my limited research, I think its a decent option for people with a boatload of AA miles who'd rather leverage them for non-flight awards. Not all of the awards seemed outrageously high and I liked the ability to pay for 4 nights and receive 5.