It's generally a combination of personal preference and financial feasibility.
Party hostels frequently revolve their social atmosphere around their bar. This can bring in additional revenue. It also brings challenges associated with drunken guests, such as disturbing others and damage to the property.
Quiet hostels usually rely on their bed sales for the bulk of their revenue, but may have lower costs to maintain the property.
As long as you can cover all of your expenses and make a living, pick whichever style suits you best.