Luck made him? Well guess what, Luck can make him again. I don't care if its a chicken or egg really. As long as you get the points.
I think you could reasonably expect a slight bump from last year. Luck will be better and so will Hilton.
He was pretty much WR2a to Avery's WR2. In the second half of the season Avery got 55 targets while Hilton got 46. This year the TEs have progressed (they typically take a bit longer than WRs to learn the NFL) and they've signed DHB.
To me, DHB > Avery.
And I think you missed two things. First I said Luck/
Arians made Hilton. Second, Luck led the league in deep passes. I bolded it the first time, but maybe that didn't stick. This year they've signed Bradshaw and have a totally new offense. So yeah, last year =/= this year. Age old fantasy football mistake.
Also, why all this love for DHB? What exactly has he done in 4 years in the league? In a 1 ppr league, Hilton scored as much in his rookie year as DHB has at his best in 4 years in the league. In current depth charts, Hilton is listed as the starter opposite Wayne (not DHB, who is listed behind Wayne).
And despite Avery having 55 targets during the 2nd half of the season, it was Hilton who finished with far better numbers.
Avery -- 26/327/2 on 56 targets (12.5 ypc). He failed to top 37 yards in 6 of those 8 games (and both TDs in one game)
Hilton -- 26/506/5 on 46 targets (19.4 ypc). He scored in 4 of the 8 games and had three 100 yard games over that stretch.
There's a reason Avery is no longer with the Colts. And there's a reason DHB signed with the Colts for only a one year, $2.5M contract ($1M + $1.5M signing bonus).
You're giving way too much credit to DHB, who has thus been a disappointment in his career and whose contract doesn't show much enthusiasm by the Colts, and not enough to Hilton whose numbers improved as the year went on and were quite solid. From week 9 onward in the 2nd half of the season, Hilton finished WR15 in my 1 ppr league. If anything, he's being incredibly undervalued at WR40ish.
Yeah, this is the main flaw in FF Ninja's logic. I think he assumes DHB is going to surpass Hilton since DHB has a more protypical WR size. There's a reason why OAK let him go.....he's not that good. Drops a lot of passes and doesn't run really good routes.
That said, I agree with Ninja that DHB is a great buy at WR59, becuase there is that chance that he does surpass Hilton as the #2WR, for the reason that a change of scenery (and a better QB) really helps DHB improve.
And there is the 3rd point that....someday Reggie Wayne is going to slow down. Maybe it's this year, maybe not. There is going to be a time where some other IND WR is going to be the main guy. Not sure if Hilton can handle that, but there could be a more even distribution of targets in IND.
I think Hilton is an OK buy and DHB is a very good buy at their respective ADPs.
At no point did I assert that prototypical size was the sole reason DHB would beat out Hilton. I said that was one thing he had going for him. I would also like to advise against blindly saying

"well, Oakland's management let him go, so he must suck." That team is in disarray. How many QBs and coaches have they gone through in the last decade? They currently are probably rolling out Matt Flynn this year, so why spend money on WRs? Streater looked pretty damn good last year and Moore is still very cheap. Maybe Ford will be healthy. From my perspective, they had no incentive to spend money on a position that was probably going to be held back by the QB anyway. They have much more pressing needs than the WR position and they might as well see what they've got in Streater and Moore.
It's funny you say DHB drops a lot of passes when Hilton led the league in drop % last year. I consider this one of the few hands battles that DHB is clearly the winner. I can't speak to his route running, but by all accounts he's a pretty solid, dedicated guy so I don't doubt that he'll do alright in this component.
I really thought he had turned the corner in 2011 when Palmer came on board. That 37/541/3 in the final 7 games was very promising. Then he got injured early and the whole offense somehow took several steps back from the year before despite Palmer actually getting in an offseason. I guess we can look at this as a red flag, but generally, when an entire offense craps the bed, I don't place a whole lot of blame on any one player. That zone blocking system just didn't work for that team and set them way back. You know you screwed up when your QB does better coming off of a couch than when he gets in a whole offseason of work in a system.
I hate to be picking nits since you said you agree that DHB is good value, but I gotta advise against Hilton at WR32. That is a steep price. Look at the other guys around there. Some much safer bets with higher ceilings. My personal favorite is Miles Austin (WR34).