"it almost always makes more sense"
"most of the time"
"if the hotels are outrageously expensive for whatever reason."
I don't understand how you can be so shocked when you, yourself, already listed the reasons why people wouldn't want to stay at a hotel.
Because for all the time where it doesn't "almost always makes more sense".
I remember one time where I traveled to a big city for a couple of days and had the unfortunate experience to find out there was a big conference during the week and the prices of hotels have increased dramatically (making it non affordable for almost all human being)
Airbnb can be a superior offer in that case. You will not witness the same degree of price discrepancy between the price of airbnb room and a hotel room (a hotel room price can change to 4x its normal price in case of special event in a city).