First the cons: the room is VERY dated (think 70s bach that has not been refurbished), there is limited hot water for showers, and the noise insulation is non existent (creaky floors and a thin neighbouring wall). And I though this was pricy when compared to Auckland and Coromandel equivalents, but looking at other Tekapo choices I think this is simply a reflection of overall high accommodation cost in this town.
Now the pros: VERY friendly host who was happy to help with many questions before, during and after our stay. Location is perfect: you can easily walk into town, but being "outside" town means there is no outside noise, and you can easily wander down to the Church of the Good Shepherd for awesome pictures when the others visiting the church leave for the day. And the room is HUGE; three of us could spread out for the the several days we stayed.
So as long as you don't expect a "flash" room, this is a great option.