The point of Alexstrasza is to deal a large chunk of damage to your opponent (or heal yourself back up), while forcing your opponent to waste resources the next turn to deal with the 8/8 body. I don't think anyone ever counts on Alex surviving, regardless of the situation. If she does, it's just a bonus.
If there was a 9-mana card that did 10-15 damage to your opponent and forced your opponent to choose between paying 3mana next turn or having to deal with an 8/8 body, wouldn't you play it?
She is actually better than what I described above, obviously, since your opponent doesn't always have the means to deal with her at ALL (esp for only 3 mana). Alexstrasza is the most powerful card in the game, imo (I won't commit to calling her "the best", though), and she fits well into any late-game deck.
As for the Loot Hoarders, I play 1 Youthful Brewmaster (applications are obvious) and 1 Tinkmaster Overspark (works beautifully with your 1/1 dudes and can deal with concealed and/or very powerful minions).
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You sure Cairne Bloodhoof isn't worth crafting? He seems pretty good to me.