What lodging is "worth" and how much it costs Hilton to provide are two entirely different things. If you spend $100 with Hilton to rent a room, the incremental cost to Hilton to rent you that room is way less than $100. Even the allocated cost for use of the room (allocating overhead against all rooms rented) should be way less than $100.

So, for the 1,000 HHonors points Hilton gives you for paying $100 toward renting the room, Hilton derives profit that (ought to) well outweigh the cost to them of redeeming that 1,000 points.