We have never done the Fantasmic Dinner Package. We have never stood in line for Fantasmic, and have seen it at least 6-8 times. We go about 30-45 minutes before the show starts. Seating starts 45 minutes before the show. They used to have entertainers doing things down front, but I haven't seen that for several years.
Yes, we are waiting, but we are seated and you can bring stuff for the kids to do, get a snack, or whatever. Sitting and waiting beats standing in line.
If you want to walk in 10 minutes before the show and get a seat, you do need the package. The show is always full or nearly so.