Staying in hostels is the best way to meet other like minded travellers and discover the best hidden gems a location has to offer.
Sadly, I think that people who are too precious to try staying in hostels will be denying themselves some amazing experiences.
I have stayed in many hostels across the USA and always had an absolute blast. I even ended up living and working in USA Hostels San Diego where I made some of my best friends.
Just one example of an experience I wouldn't have had if I hadn't been in a hostel was in San Francisco. We were told about a special event that was happening at 5am the following morning to commemorate the 100 year anniversary of the great earthquake which we never would have known about had we just been obliviously holed up in a hotel. It was an spine tingling moment as hundreds of us made our way in the early hours of the morning to the service and stood in pitch darkness as the sirens rang out in remembrance. Such a historic moment and I still remember it vividly and am so glad we were chatting with the other hostel patrons who were in the know.
I also think that if you want to spend your days lazing by a swimming pool, you might as well just book into your local hotel. Why waste your money on traveling if you don't really want to experience or see anything of the local culture.
Don't get me wrong, hostels can be noisy and cold and you basically need to lock your food up with a padlock so it doesn't get eaten by the strange French Canadian guy who sings in the shower (personal experience), but you will meet some of the most fascinating people who will happily share with you the best places they have discovered to visit. You will undoubtedly make friends from all over the world. Personally, I wouldn't miss out on that for any 5 star hotel!