I've always thought that this would be a great experience, but I would think you'd have to book a room WAY early or know somebody in the area to stay with. Really wonder where all those people stay, get food, go to the bathroom, etc.
Never once saw the great fireworks up close from the Chicago lakefront despite living in the area a total of about 25 years. Tried to run down there once with friends just after my college years and we got stuck on the highway quite a ways from the lake, on 290 I think. Everybody just got out of their cars and shared drinks and snacks while watching the show, kind of a nice experience in its own right. Taste of Chicago was similar, I had to work in the city one weekend when it was going on and it was just a nightmare to get around.