for many tourists, going on a holiday is often to fulfill a certain fantasy or image they have of the place or of themselves.
many tourists are willing to pay high prices to stay in expensive ryokans, 5 stars hotels, etc to complete that fantasy
likewise, there are also the other extreme end. some tourists are willing to rough it out in internet cafes, wet tents in the nowhere in shikoku, sleazy love hotels, privacy-less capsule hotels to experience the "reality"
and for some tourists, they do not consider accommodation as part of their holiday experiences. so it is strange for them why people are willing to waste money here.
i have friends who don't consider food as important. bread and cup ramen is sufficient for them.
different strokes for different folks really