The service isn't exactly poor. It's just that I've stayed at 5 star hotels in major cities for the same price or LESS, and the service in those places is often exquisite. And additionally, in most of those hotels, you have better amenities- better pool, or spa, better bar or restaurant that you would not have trouble getting a reservation at because a guest would have priority over a nonguest. A concierge that can probably get a table at a better restaurant than anything on Disney property.
I suppose it would depend on what you consider good location as well. A deluxe hotel in a desirable Paris neighborhood gives you access to that desirable Paris neighborhood. A deluxe hotel at Disney gives you access to...the Monorail which will take you to a Disney park. I love Disney but to me it is a theme park resort. It's no Paris, if that makes any sense. I don't mind paying $500+ a night for a Paris hotel, but I don't see the same value in doing the same at Disney.
I do love the theme thing, though, I'll admit that. And that's probably the only reason I'd go for deluxe at Disney.