it all depends where you’re coming from and what seems expensive to you. when we got to cancun from rural/poorer/less touristy parts of mexico, it seemed like an expensive nightmare – super developed concrete-covered touristy faux-paradise, overall practically like being back in the US (in terms of hummers, billboards, $$ restaurants). on the other hand, i’m sure coming from the US or elsewhere it might seem very ‘mexican’, hostels are ‘only’ $10/bed, full of cheap markets, etc. so that part is all relative.
it certainly didn’t feel like it was set up for backpackers, but we managed—- two hostel beds, close to US meal prices at restaurants or some grocery picnics, avoided any other shopping, and there was a bus you could catch to get to the beach (which as I recall was somewhat hard to get to without staying in one of those beach-side hotels) .... but spent a lot more money than anywhere else.
what are you going there for? what do you hope to do, see, experience? how much money to you want to spend? these questions will lead toward whether it’s a good place to go. personally, i’d hop on the cheap flight and then get on a bus (NOT always cheap – check that out first so you’re prepared) to another part of mexico.