Overall, the decision to move AI into W&H was closer to good than it was to bad.
Conceptually I think it was a good move to take the team to W&H, even if it didn't really make a whole lot of sense in terms of continuity (I mean, would the members of AI really be so easily tempted by their seasons-long enemy?). It gave us a fresh new set while also resetting some characters that had gotten rather stale. As much as I liked the Hyperion Hotel, by the end of S4, it was just irredeemably tainted with all the Jasmine/Connor stuff, so a change of setting was more than welcome. By moving the team into W&H, the writers were able to maintain one of the central characters of the show (the city of L.A. itself) while putting a fresh spin on something the audience was already familiar with (W&H). What I'm saying is, the show and the characters needed a change. Too much of a change would've been too jarring for viewers, so whatever alternative they might've gone with as opposed to W&H, it probably would not have worked as well. If they stayed at the Hyperion, things just wouldn't have evolved.
I will say there were some things that didn't work for me. In particular, I didn't really buy that all of them would or should make the transition so easily. For example, the point of Gunn's character is sort of that he is a warrior, and he keeps fighting the good fight even if there is no end in sight. Although initially haunted by his inability to protect his sister, the writers seemed to have pretty much forgotten about her after her death. Without that, there is no redemptive element to Gunn's story, and that's part of why he just never seemed to fit in with the rest of the AI team. Giving him this uber-brain didn't help matters; it was a forced contrivance to prevent him from becoming utterly useless at W&H. I honestly think it would've been better if, at the end of S4, the writers had had the courage to say that at least one of the AI team members was not on board, and quit when the rest of the gang signed on with W&H. This would've been a good opportunity to write Gunn out of the show, although perhaps they were contractually obligated to keep JAR on for another season.
Exactly.. in a way that serviced the story as opposed to him being proverbially chained to W&H and forced onto the show.
Honestly, it was obvious from BTVS S4 on that Spike's character had become so popular with audiences, they were willing to use any excuse, no matter how contrived, to keep him around. (It astonishes me that the Scoobies allowed him to stick around after what he did to Willow in S3, and that they somehow managed not to stake him in all the years they were acquainted with him.) It wouldn't have mattered what happened in ATS S5; they would've found a way to bring Spike in. Still, ATS S5 Spike was an exponential improvement to BTVS S6-7 Spike, so I can't complain too much.