Just checking one city, Los Angeles, and picking out three hotels where I have stayed in the last two years, here are three quick samples of truly NICE Cat. 1-4 hotels:

Renaissance LAX is a Cat. 4 hotel I stay in frequently, and it is a truly nice hotel, which freely gives suite upgrades to Plats, going back at least 8 years (I first stayed there for a professional conference held in their meeting rooms in 2004, and stayed as recently as four times in 2011, with a suite upgrade every time across 9 or 10 stays).

Courtyard Los Angeles Westside is a Cat. 3 Los Angeles hotel where I have stayed, and for a CY, it is VERY nice.

Manhattan Beach Marriott is another Cat. 4 hotel I have stayed at, and is a nice hotel in a very nice location, close to great restaurants and movie theaters, and they freely give suite upgrades to Plats.

It really is not difficult to find nice Cat. 1-4 hotels in most cities, NYC and HNL being notable exceptions, although in NYC, those hotels exist, they just are not in nice locations.