Interesting article... I think the last time I did chores at a hostel or got locked out during the day was over 10 years ago. :)
I don't know about that $34 billion per year industry figure that is quoted. If they are getting their statistics from Hostelworld and Hostelbookers, it probably includes a lot of hotel bookings. Or maybe they are confusing "hostels" with "youth travel". There is a lot of overlap, but they are not exactly the same.
I just saw this related article -- maybe based on the info in the NY Times: