Blurring the Lines between Hostels and Hotels

We are all well aware that there are many differences between hostels and traditional hotels, as well as boutique hotels and motels. There is definitely a market for each business model  to succeed at the same time, especially because in my travels I haven't noticed a particular overlap in demographics and I was curious as to what some of your thoughts are in what makes a traveller choose a hostel over a hotel and vice versa? One of the most obvious factors is price point with dorm rooms being substantially cheaper than hotel rooms, but as many hostels are embracing private rooms and amenities similar to hotels, the prices can creep up. Likewise, major hotel brands such as Marriott are starting to offer entire brands that seek to captialize on markets and lifestyles traditionally dominated by hostels. Both of these factors, as well as many others, continue to blur the lines of tradtional accommodations. What can hostels learn from the hotel industry, and what can hotels continue to learn from the hostel industry? If you traditionally choose to stay in hostels while travelling, why do you choose hostels over hotels and what could the hotel industry do or change that could draw your interest in staying in a hotel. Conversely, if you typically stay in hotels, what changes could increase your interest in hostels, or other "non-traditional" accommodation styles?