You can argue the merits and faults of the Sheraton Kauai until you're blue in the face. Consensus on flyertalk is that it two different resorts, depending on which side of the road you are on. Ocean side is almost universally loved. Garden wing is almost universally hated. I stayed in the Garden Wing about a year and a half ago and tend to agree. My room was reminiscent of a Red Roof Inn I visited many years back. Stale, tired, worn, tiny bathroom, etc... Main buildings and beach were great, as was the breakfast (which is no longer included in the resort fee), but the Garden Wing doesn't cut it as a Sheraton, Westin, or 4 Points for that matter. It generates a second class citizen feeling rivaled only by guests in the Sheraton Waikiki Manor Wing.
Collective wisdom on this one is if you're going to stay there, do whatever it takes (money, points, flirting) to ensure you are in the ocean wing and you'll probably be pretty happy. Take your chances on the garden wing and you'll be greeted with an "I told you so" upon returning to the boards...
In other words, I think you're both right.