In fact I agree with everything you say too Rob
Where I tend to differ is in the belief that AI is bad for local tourism economies. It's an opinion I have shared several times on CBF. That is, it is better to have an AI hotel in town (Calis, but anywhere really) than to not have it. If one person ventures out of the front gate and buys one Efes on the other side of the barrier, the town benefited. Best to have people renting villas and booking self catering hotels, of course it is; but for the reasons already given, better to have 4 people in town on an AI basis than to have them in Egypt on a similar AI holiday. Who knows, they might even come back next year and book a villa...
I also agree with your reasoning, that you wouldn't have the funds from your holiday budget to sample the "outside world" if you paid 3k for an AI holiday already. But I don't think that is often the case when the figures are added up. Without spewing out prices and figures, I believe it is often only slightly cheaper for a decent level of AI than it is for a fair quality hotel. So why not pay £15 per day more and use the breakfast/snacks/Efes/vodka facilities and go out in the evening...
I would concede that AI can't compete with a private rental, if a private villa or apartment is what you prefer. But there is something between a hotel and an AI hotel that I wish people could recognise - that being the use of AI as a base from which to have a breakfast now and again, neck a few, then bravely venture outside with a few quid.