I don't particularly object to the Night Riviera pricing. There are cheap room supplements to be had in advance. Compared to the Caledonian Sleeper, there are some right bargains to be had frankly.
I do however think that a lot of the tension around the sleeper pricing discussions is because their main benefit is somewhat conflated, and because while there is enough interest for them to get fully booked, there just aren't enough budget options. Both have removed the option to share with strangers, and them being 2-person cabins means a true budget option just isn't there without large subsidies. While not for everyone, there are plenty of people, especially young people, who would be happy to have a bed in a 4 or 6 berth compartment if it came in at a cheaper price point. Travelling at night and even factoring in engineering works, I'd imagine we have the capacity for it and it would sell.
I take the Caledonian Sleeper for work. Yes it is often cheaper to get a daytime train + cheap B&B, but then I'm losing out on 4 hours with my partner and dog on the way out, and working with unreliable connectivity and my dog on her own all morning on the way home. When I add up the price of a daytime train + hotel and compare it to the CS, there's often not a huge amount in it, but it's often sold-out last minute, which is my bigger frustration. There is of course the flying option, but I'm not sure we want to encourage domestic flights for obvious reasons, plus for many journeys I make I either end up at a similar price point, or I'm having to get a bus or two to the airport, get there say 45 minutes early to get through security and be around for gates closing, then bus/tube/train at the other end, etc; and it often just doesn't seem that convincing. For the NR, you can't get direct flights from Penzance or Exeter to London so it's a bit mute.
On this 'quality time' basis, I think train+hotel vs sleeper is really personal preference. The fact that the sleepers have such high utilisation rates suggests the public value this aspect over mere price, even if it is a smaller bed and a shower at the destination rather than in the room.
If someone is on a very tight budget, they go with coaches. But really, a whole night spent curled up on a coach seat is not for most people if they can avoid it, especially on routes where they take significantly longer.
Basically I'm happy ish with the sleepers as they are - I just wish we'd add a handful of additional budget sleeper options.