It's a conundrum really. They have become inflated, but in the end it's all a market demand/supply game.

For the discerning luxury traveller, the hotel is as much a destination as the place/area/country they are visiting, and privacy is most valued, and thus priceless.

If the luxury traveller is willing to pay $2,000/night for what they want, who is to argue?

I happened to stay at Alsisar Haveli in Jaipur a few years ago, and that was about US$60/night (back then) and it was one of the most 'valuable' stays I've had (not comped for review, I was paying). Sure, the food wasn't great, the service was subpar, but the atmosphere was very much worth it; especially when you take into account the rate you are paying.

What would you get for $60/night in the US? A suburban Holiday Inn? In my home town of Hong Kong, you would have to double that to get even get a room at the IBIS. Neither of these two are worth it.