Bearing in mind that it's a youth hostel so your expections need to be appropiately set, this was an reasonable place to stay overnight whilst on a roadtrip of Hokkaido. Lake Mashu is literally just 5 minutes up the road, and you're conveniently placed to visit Mount Io and Lake Kussharo. It's on the edge of town so having your own transport will make things easier.
The hostel itself is showing its age but is reasonably well maintained, but there are some areas of the property that would benefit from some maintenance and investment. So in summary, Masyuko Youth Hostel is ok, but it will unlikely be the best accomodation of your trip.