I can understand why you feel this way becasue I have heard some awful recordings using them. They will never replace the feel of playing in front of a real tube amp - but with patience and a good ear, you can get very close. They are used by many pro guitarists for live and recording work and can so closely resemble the "real" thing even to the extent of backing off your guitar volume which then cleans up the tone - just like the original amp.
As ever, like with all sound equipment, just because you have a full tool box, doesn't automatically mean you can obtain a great sound - you have to work on them to get the best out of the devices. Yes, you can get awful tones from them - just like you can a 65 Fender reverb deluxe too.
I use my POD XT extensively for recording work. I mainly use it for its stomp box collection, gate and reverb selections plus a limited range of amp simulations. It is perfectly acceptable in many applications depending on circumstances and set up correctly, you would never guess that it was a "model" - its the setting up that makes the difference, not the device itself.