We've stayed at HIFS and the All Stars.
You're correct, at HIFS the rooms are much bigger. There is a free breakfast buffet and kids eat free at certain times during the day. There is mini golf, a train ride, and a pool that is fantastic for kids. With the KidSuites at HIFS, there is a separate living room, master bedroom, and kids room. The HIFS also includes 3 TVs and a fridge and microwave.
With all of those advantages at HIFS, where would we stay?
At the All Stars. A couple of years ago, HIFS had some $89/night specials that were a great deal. However, now, the best rates I've been seeing are $109 unless you have a special discount such as senior citizen. The All Stars have been advertised with codes the last few months at $59 and $69/night.
For around $40 less than HIFS (with a code) you can stay on Disney property. Yes, the rooms are small, but we decided that unless we were going to stay at the resort most of the time, the amenities at HIFS are great but not worth the extra money. Also, read the comments on this board about what people love about the Disney resorts.
We stayed off site for our first 4 trips. I was devoted to the off site hotels for their additional space and better price. Our first stay at the All Stars changed our mind. Unless Disney quits the discounted rooms, I would have a hard time staying off site, no matter how nice the hotel is.
There are people who won't stay at the All Stars, but there are also people who won't stay off site.
For a variety of reasons, there are some people who never feel the same "magic" that others do when staying on site. If you do try HIFS, you'll probably love it, at least my family did. However, someday try a Disney resort just so you know for yourself whether you should be looking at on or off site resorts for your future stays.