I personally don’t see it that way.
sure I typically wouldn’t spend more than $250-300 USD per night for a “typical” hotel room (e.g., courtyard, Marriott, Sheraton, or Renaissance) but I use points for “inspirational” properties.
For example I have redeemed points for St Regis Maldives, St Regis New York, Ritz Carlton Kyoto.
Lets take RC Kyoto as an example, a typical night in the base room would cost $1200-2000 USD depending on the season. Points? 85K. Would I have spent $650 USD cash per night instead for a hotel of this caliber? Yes. I would. Point redemption made me just do that.
However, I wouldn’t spend $600 or even $400 USD per night on a “typical nice hotel”.
So it’s not really a fair comparison when you redeem points at very high end properties while thinking, but I wouldn’t pay over $300 anyway!
Point redemption allows me to experience hotels that otherwise would be out of my reach (well, my rational reach)