Most of us probably agree on one thing: using points/miles for coach class air travel makes little sense. The question is whether to use them for premium class air travel (whether upgrades or award tix) or for hotel stays.
I used to transfer my Starpoints for use toward premium int'l air travel, figuring that while I can afford to pay out of pocket for just about any hotel room, premium air travel is totally out of reach. But lately I've been accumulating more airline miles than I can use. So I've switched to using points for hotel stays, and will probably continue to do so as long as my airline accounts are flush. YMMV.