and the ones I've been in have been cleaner than a lot of hotels I've stayed in here
This is very true. I don't stay in dorms any more, but in a good hostel, you can get an excellent private room with double bed, cable TV, air con, your own bathroom and a range of services for maybe a couple hundred RMB at most (much less for shared room / dorm stays).
You can pay twice that or more at a regular 'hotel' and get CCTV Nine, shitty service, and not much else, especially around the big tourist areas.
It used to seem logical to me to go for cheap local hotels, but although there are some nice cheap chain hotels like Home Inn that are a good bet in those cites where no-one really WANTS to stay (Shenzhen, I am thinking of you), I have found overall 'backpacker' hostels generally are a better choice.