That is a question that only each individual can answer for him or herself.
Factors that go in to that decision are how much discretionary income to I have? How important is location? Do I need to go during the busy season, or can I go during value season? Is on-site recreation important to me?
What kind of trip is it, family vacation or honeymoon? Do I care about atmosphere? Do I want a quiet(er) retreat, or a bustling hotel with lots of kids? What about something unique, like a safari type experience? Or an on-site waterpark?
Is it important that there be on-site childcare or children's clubs? Am I concerned with crowding, or the size of my room, or the size of the bed? Would my husband and I be able to sleep on a double bed, or do we require a king bed? Will we, in fact, be at the hotel just to sleep and shower, or do we plan to spend some down time at the hotel?
By paying more for a room, what do I have to give up? If I pay less for the room, what can I do that's really important to me? A nice dinner out, or an Illuminations cruise?
What can I live with? Will there be enough privacy for everyone? Will there be enough sinks for everyone to brush their teeth without a riot? Will my vacation actually feel like a vacation?
These are all very personal questions and decisions, and I think most people make some compromises (they spend more, but are more relaxed with two sinks vs. one; or they spend less, but put up with some minor - to them - inconveniences; or they go to a deluxe hotel, but get the garden view), but ultimately come up with the decisions that are right for them.