Totally agree with your wife, for the most part. I always cover the exposed LEDs on my various devices before going to bed. However when I'm not trying to sleep, my MBP's pulsing light is mesmerizing.
5 layers later, and it was about 1/2 the brightness of my MBP's snoozer. About right for a dark room. A couple months later, when I packed my tower up for xmas vacation... the post-its were bleached white, all the way through, in front of the LED. Way too much power.
My MBP? Still too bright for the night, IMO, but I tend to like dark. It's at least not annoying, like damn-near every other light-emissive device in my house at night.
Best solution? Electrical tape. You can't even see it unless you look close and I really couldn't care less about the led. If the router isn't working I'll know.