When recording I use amplitube almost exclusively. The key to getting reasonable tones from the plugin is instead of auditioning hundreds of samples pick a half dozen or so by using the filter to get near what your looking for. Then take the time to audition the different cabs and the mic placement emulator. The mic position emulator module alone can dramatically change tone and dynamics. It's really no different than positioning mics on a real cab or amp and may actually be a bit more efficient.

This in my opinion is where simulators can shine because hardware can only give you a definitive amount of options. If you want more sound options you have to add more hardware. Most simulators have a fair mix of options built in thus giving you more flexibility. On the flip side of that though it's easy to get lost in a project chasing "that" sound with a simulator. The limiting choices of hardware force you to make a decision and move on thus allowing for the completion of a project. Then again by using a simulator you can go back at any time in the project and tweak the guitar without re-tracking which is hard to do with hardware.

In the end it's all about preference and each will find their own. I don't think one way is better than the other. It's what ever allows you to be creative and enjoy the process of creating music. I will say though that in the process of choosing an emulator it has on occasion sparked creative ideas that I have used in other projects.