Don't feel guilty or anything, do it if you can afford it. Why not? I'd just check as a pp said about atmosphere at certain times etc., but I am sure the service and quality is excellent.
As for me, I could pay that also but no way would I. My reasons are not frugality it's just that I dislike the idea of being "fawned" over and someone being at my elbow every five minutes checking if there is anything I need. They can be discreet I know, however I prefer mid range and anonymity!
We are all different and spend what we can afford on things that give us pleasure. My no. 1 priority with accommodation is access to everything on foot, i.e. right in the centre of the action, and a good breakfast included. I've often stayed in 2 and 3 star hotels just for this, and all were clean, functional, clones of other places. I can't see the point of paying thousands for a bed, bath, shower in a 5 star when I can get the same for less! We generally only sleep, shower and have breakfast in a hotel, the rest of the time is mostly spent exploring or sunbathing.
That's just my feeling on it anyway.