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I’ve spent a lot of summer trips hiking around small vacation towns in Colorado, and I’ve always found regular hotels to be a great way to do it. Occasionally I need to drive a bit more, but it’s not too bad.That sounds nice, and it suits a lot of people just fine. But try doing that with a family, and on a limited budget.
I'll give you an example: last year I "rented" my own place for a week with family. We crammed thirteen of us into our house (it's properly equipped to sleep 12 but we've never had that many aside from our own family). My father-in-law took us out to dinner the first night, and we ate breakfast at restaurants most mornings. The cost of food was likely over a thousand dollars for the week, but it could easily have been double or triple that if we'd eaten out every day. As it was, some of our money went to the local grocery store instead of restaurants, and we were able to afford a week-long vacation instead of just a weekend.
You can't do this in a hotel with mini-fridge and a microwave. If you want to bring your family on a week-long vacation in the Colorado Mountains, and if you're not wealthy, then you do it by renting my house, which has a full kitchen, enough rooms, beds, and foldouts for a large family, and costs half or even a quarter of what the same space a hotel would cost.
So it's not that hotels are worse than vacation rentals. They're just different. They serve different markets. If places like mine didn't exist, the groups and families that stay there aren't going to stay in hotels instead; they're not going to come to this town at all, because hotels can't provide comfortable longer-duration vacations that are also affordable for most people.
This is extremely important for ski vacations. Skiing is expensive enough as it is, that most people can afford just a few days a year with the hotel, food, and fuel costs that come with it. But my place can make it downright cheap in comparison.