The Disneyland Hotel would not necessarily be a less ideal location. The pool is better for kids, access to DL through the monorail is better, presumably there would be a concierge level w/ DL fireworks viewing @ the concierge lounge and if the points were lower for the same size rooms on the same days, I would probably pick a Disneyland Hotel DVC over VGC because I'm just that "thrifty"......I love the Grand Californian, but somehow the Disneyland Hotel just feels more Disney-ish to me.
The DL Hotel is, of course, the original "Disney" hotel...but certainly not the first one that the Disney Company built. At the DL Resort, the Grand Californian is the first Disney built hotel. Disney didn't actually own the DL hotel until they bought it in 1988 (I was working at DL when they finally bought it) - and they didn't aquire the Paradise Pier Hotel until around '99 or 2000. The DLH has the history, sure, since Walt allowed his buddy Jack Wrather to build it, but it really only feels Disney-ish because they redid it after buying it, and again when the DCA/DTD expansion came along. Before that it was just a boring box hotel with blase decor.
I love it for what it is - and the history that it has, but honestly that's about it. I've enjoyed staying in it, but it is true, the rooms are old and tired. The hallways are dark, and the A/C & water pressure are not the best. It needs serious updating, which is of course what they're doing to it.
In re-reading Al's article, the nice "new" pool that's more kid-friendly than the GCH's is only about 8 years old...but it's apparently going to go bye-bye too. Along with all of the myriad mish-mosh of shops & surrounding structures. And of course the old Dancing Waters area in the back corner will go. Who's to say the Koi Ponds and waterfalls will stay? They'll probably be ripped out too. All of those changes, along with the gutting & rebuilding of the towers will remove the actual history. It will be a completely new place by then, and yes, will still feel "Disney-ish", but the original charm of it all will be gone. Personally I miss the days of riding the monorail TO the Hotel vs. DTD. The station didn't move in the expansion, but a lot of the original hotel grounds were torn up to build that darn AMC/Rainforest Cafe/ESPN Zone area and the bridge across the street. I miss all of the outlying cottages and the "Travelport" from the '60's.
As far as fireworks viewing goes, if they put DVC units into the new 4th tower that's supposed to be part of it, it'll be further away from DL proper than the existing towers are. Unless it's taller than the existing towers, the viewing won't be all that fantastic... there'll be better viewing of WOC than the DL fireworks more likely. Especially when you consider the 55 years of growth of those beautiful trees throughout DL proper that are purposely there blocking sight lines.
Also, who's to say the points will be cheaper? Sure they probably will be since the DLH doesn't have the private entrance niche of the Grand Cal, and as BeccaG said, the DLH doesn't have the same 4 diamond rating that the Grand Cal does... but they could throw their marketing machine towards the "original Disney hotel" thought and try to have some ridiculous premium points strategy - which wouldn't work the same way BLT did, definitely.
Oh, and then there's the current lack of the booking fee...sad to say, but my bet is that if they do build more DVC units at the DLR, regardless of which hotel they get attached to - that $95 fee will be turned on in a heartbeat just to be able to stay at the PPH. I don't relish that thought at all, but won't be surprised by it at all.
