I think the problem is that people use 'design' as too broad a term.

In my mind 'Good Design' is more of a technical comment that talks about whether or not the piece follows the rules of design. If it follows the rules then it's good design.

Good Design is not necessarily beautiful or striking. A lot of designers (myself included) can get caught up in the mind set of 'beautiful' = 'Good Design' which is not the case. Most sites should avoid looking ugly but do not need to look beautiful. Also beautiful is often also associated with intricate. Making an intricate design is a different skill set then creating a sparse design. This keep a lot of beautiful sparse sites off these 'beautiful' lists.

Good Design is not necessarily usable. I think usability is most important for a website. A usable website focuses on grouping information in intuitive ways so that users can find the information when they need it. Information is not just text but buttons and actions as well. A usable website does not need to be beautiful or have good design.

You bring up an interesting point... something that I've been looking at at our site as well: how much do these decorations contribute to the overall experience of the website?

I don't think there's a clear answer to this but several issues come to mind. If you're running a sales site that has few products, I think it's advantageous to have a really attractive home page that's image heavy. However, if you're running a site that has a lot of textual information, I think all these ornaments are too distracting. I find it extremely distracting when I'm reading something that's set against a background of which every pixel is shaded. I think you should stick to CSS effects and pay close attention to typography and worry less about shading every pixel on the page. One thing that's exempt is the header. You can go crazy at the top of the page but I'd leave the rest of the page as minimal as possible.