One thing that can make a YHA holiday good value for money is if you decide to use the kitchen to self cater for your evening meal. As well as not having to pay for a meal out, you are saved the bother of finding a child-friendly place that's open in the evening.
I agree that if you go compare a YHA family room price with that of a B&B, there's often not a huge difference. However, I've found hostels are willing to negotiate on price sometimes, especially if they have lots of spaces. We often get bigger rooms with extra beds, too, for no extra charge. Also, unlike a B&B you have the option of self catering too for no extra cost. Some hostels do not close during the day, so you can use the facilies whenever you like.
Having active children age 3 and 8, youth hostels get my thumbs up over B&Bs because of their lack of breakable knick knacks, and quantities of running around space indoors and out. My two have always found plenty of friends to play with, too. Once your child is old enough to roam around the hostel with other children staying there, they can happily and safely amuse themselves, giving you a breather. The downside is that the bedrooms, with their bunks and blankets, are a bit spartan. Nothing breakable because there's nothing to break.
I don't know where you're from, but I'd definintely recommend the YHA in Alfriston, Sussex. It's between Brighton and Eastboune. The hostel is in a beautiful old stone building. It used to be a hotel and still has a bar room ( bring your own alcohol).There's a lovely enclosed garden, great for children to run around in. The only thing that marred our visit was the eager 20-something mananger who asked all the adults in the bar area to go to bed at by 11.00 becasue he wanted to turn off the light in that room. My husband was speechless!
Other good family hostels we have stayed at include Sheringham in Norfolk (modern building, facilities include a good games room for children)) and just outside Margate (a former victorian B&B house) in a quiet terrace opposite a lovely sandy beach, cafe and shop. Not too crowded and just right for young children.
I have met some nice people staying at the hostels. Most look like off duty teachers. The family hostels do attract lots of families, though. Some families seem earnest YHA-ers like the couple with four children who all went to bed at 8.00 each night and spent the days cycling around the villages, to the more casual YHA-ers like us.
Hope this helps, do ask if you want to know more,
welcome to mumsnet and please tell if you visit any hostels - I'd like some recommendations too