Since the Disney cancellation fees are comparable or lower than the price of insurance (depending on coverage), I didn't see much point to it for our Disney trip. For other vacations such as cruises, we always get it.
That's interesting, I hadn't thought about that the larger our family gets, the more expensive the insurance will be! Right now we love having a "free" toddler. The Disney insurance does cover flights, though, and I'm sure that's less than the cost of a nonrefundable air ticket, so that's a positive for it.