Codes are generally a better deal than points on non-
DVC resorts. If you never want to stay at non-DVC resorts, or you're not interested in using your points efficiently (lifestyle not price, or enough points you don't need to worry about it), then you don't need to worry about codes.
As to why people buy DVC rather than just using codes, I think the short answers are
-- They want to stay in DVC resorts! Codes are not better here.
-- DVC membership pays for itself after a certain number of years.
-- Resort rates, even with codes, will continue to increase.
I bought DVC for these reasons in spite of being a big code fan.
What follows is directed at those who DO sometimes want to stay at non-DVC resorts, and ARE interested in using points efficiently. Others can ignore it.
If you examine the 2002
point charts for non-DVC WDW resorts, the weekday points are a pretty good match for rack rates if points are valued at $10 each. I know not everyone agrees with this valuation but the match is too good for coincidence; I think DVC must have had it in mind when making the charts. (I know that DVC seasons do not exactly match resort seasons and this muddies the issue somewhat.)
This means that if rates well below rack rates are available, cash is the better option. What do I mean by this? Let's look at an example.
If one stays at the Polynesian resort Garden View in Value/Adventure season, the rack rate is $299 + 11% tax = $331.89. It requires 31 points (weekdays), and this comparison yields a value of $10.71 per point. Not bad.
But suppose that instead you compare to a code rate of $179 + 11% tax = $198.69. This comparison yields a value of $6.41 per point. Most of us like to think our points are worth more than that, so you may want to pay cash in this situation and save your points until you can get a better value for them, e.g. when staying at a DVC resort.
Weekends are even worse, as the same room requires 56 points, so comparison to rack rate yields $5.93 per point, and comparison to code rate yields $3.55 per point, perhaps not even covering annual fees.