I think this is as good as a hostel gets. I stayed in a 4-bed room which was warm, comfortable and clean. It had lockers large enough to keep a small suitcase (don't forget to bring your own lockpad!). It would be nice if towels were included rather than rented separately, though.
I took the breakfast offer, and I must say it was totally worth it! Amazing breakfast and you can eat as much as you want so you can last a good many hours without needing a large meal again. The location is also great: about 12 minutes from Amsterdam Central Station. The only public transport I ever used were the free ferries to cross to the city centre.