I agree with the first part but not the last. I always look at redemption rates across programs and balance hotel quality with redemption rates. I've never failed to find a good property at a rate that was acceptable (at least.5 Hilton, 1 MR, 2 SPG). I try to work out using 5th night free as much as possible, but I don't let redemptions drive my vacation planning - where we go, what we do, etc., comes first, then hotel planning follows from that.

I'd never redeem points for merchandise, car rentals, or most of the other "enhanced options" programs always try to convince you to try.