The hotel isn't a great representation of how good the Hilton brand could be, even in Australia. It's definitely showing its age. Then again, some of the other Hiltons have some older rooms, too (Hilton Adelaide on the non-premium floors comes to mind. Not sure about the Parmelia Hilton Perth.)
Why am I not too surprised that the hotel is actually very profitable.
Paying over $300 for a room at the Hilton South Wharf is somewhat palatable. That much for a room at the Hilton MEL Airport can only be argued down to necessity, circumstance or someone else picking up the bill.
In saying all this, even with the recently refreshed Holiday Inn MEL Airport, their prices tend to be rather unpleasant (in HI standards anyway), plus HI beds are usually pretty hard IMO (unless you get the premium rooms with possibly new beds).