When you don't really care how others think of you, and thus don't care who thinks you are or are not "hip," the question becomes irrelevant. I see a bicycle as a tool to get the job done. Panniers or no panniers, depends on the task at hand. Its nice to not have an ugly bike to my own eye, but utility always comes before looks.
Another perfect example of this is the umbrella hat. Who actually wears them? Well, I do. They're so incredibly practical, even if they look absurd.