As far as I'm concerned, plugins and hardware each have their role.
I don't like digital guitar amp emulators because I find them lacking in something, though at times I can't quite put my finger on what. One day I can set one up and think "actually, that sounds pretty good", go back to it the next day and think "that sounds horrible". I don't get this problem with amps, or at least so rarely that I can put it down to a "bad tone day."
I can set up in Amplitube an exact "replica" of hardware I have and regularly use, and it sounds, at best, not much like the original. As one example I have an early Orange Tiny Terror, one of the first batch of 1,000 that were made in Korea. It is quite different in tone, saturation characteristics and response to the "official" Amplitube model. I like Fuzz Face circuits, but they can't be accurately modelled because the guitar itself is part of their circuit, which is why they don't work correctly unless they're the first thing the guitar "sees". The circuit responds very differently depending on the guitar pickups and tone/volume control settings because the overall input impedance the pedal sees changes. Something which emulations can't do.
Though I admit I have heard very good results from people who use amp and fx sims entirely. Jimi Hendrix sounded amazing using a Strat and a cranked Marshall, while all I get out of that setup is a thin, bright, grating noisey racket that makes me wince. What works for one person doesn't always work for someone else.
I use hardware analogue synths for the same reason - and because they, again, have something about them that's lacking in digital emulations. My microQ is a computer in a box, and computer-based synths can do similar things and I do use a couple of them for their digital quality. Another advantage I find in hardware analogue synths is that from a programming point of view they are much simpler than most software synths which makes getting the sound in my head out of them far easier.
Effects and processors however, are a different matter to sound generation sources. The D16 Deluxe Electric Mistress emulation, for example, isn't quite the same as my original, but close enough to use and has the advantage of less noise, the settings being reproducible and a more complex interface with more options. Same with delays and reverbs with the possible exception that a Fender valve reverb unit does mono spring reverb like nothing else, no emulation coming close to it (though Springage is pretty good).
To me it's all about picking the best tools available for the desired result, bearing in mind I can run as many 1176s, Fairchild comps or Pultec EQs as I want in the box, but buying one good example of each would cost a fortune.