To each their own. I’ve been all around the world (30 countries. 39, if you count repeats, which I don’t

). I’ve stayed in at
least 100 hostels and the overwhelming majority of them have been fantastic. If you do your research, you’re unlikely to get burned. Just like with hotels. I’ve also met countless really cool people with awesome stories to share.
When I visit NYC, I stay in a castle-style hostel on the upper west side. I’ve stayed there at least eight times over the years. A hostel I stayed in for several nights in Hanoi was $8 a night, including breakfast. It was spotlessly clean. They also had several organized events, as most hostels do. Many also have kitchens so you can cook rather than eat out. You can expect to share a room with up to ten people (in bigger places with bunk beds - many of them are) but I’ve only felt uncomfortable with other guests two or three times and I simply changed rooms.
HI - Hosteling International - was established in 1932 and has more than 4,000 affiliated hostels around the world. I’ve stayed in dozens of HI hostels and they’ve always been professionally run and comfortable. A large part of the reason I’ve been able to travel as much as I have is
because I stay in hostels. The cheapest was in Bolivia - around $7.50 per night and included breakfast. The most expensive was in NYC - between $50-$60 per night. But that’s NY where I’ve seen a one-bedroom apartment rented at $11,500 a month. I once saw a one-bedroom condo in a realtor’s window listed at $3M. A friend who was with me and was a native New Yorker said, to my great shock and surprise, “That’s not bad.”
In short, don’t dismiss hostels out of hand. My experience with them has been overwhelmingly positive.