Basically agree with Pickles. Atami is an incredibly beautiful spot that has been totally uglified. (I actually own property there, but never go). That being said, Sekitei is a very nice inn and you don't really notice the town when you are there. It is very easy to get to from Tokyo and if you want the inn and onsen experience, I would recommend it. A walk on the beach is very nice also.

BTW - An interesting town renewal project would be to bulldoze everything within 500 meters of the ocean at Atami and start from scratch.