For us WDW this year was "almost" a bargain. We were able to stay at the Contemporary for $66 a night (thank you Shades of Green!), our round trip airfare for our family of four was $762 (thank you Southwest Airlines), and we were able to get discounted park hoppers from Shades of Green. If we had waited a couple months, we would have been able to buy those $99 hoppers Disney was offering the military. I honestly don't think the food is THAT much more expensive--well, some restaurants are, but most are fairly comparable. I think when all was said and done we spent about $2,800 on our 10 day disney trip. I have found that when we don't go to Disney, we spend a lot more on meals, entertainment, etc., in order to fill up our days. Ie- in Hawaii we spend money on snorkel gear, tour boats, luau's (VERY expensive!), and I am always compulsive about buying expensive trinkets in Hawaii. At Disney I am happy with a new keychain and tshirt. We are going to Vegas next Spring and I thought it would be cheaper than I trip to the world, but I doubt it will be because DH wants to see Blue Man Group, maybe Penn and Teller and I want to see Mamma Mia- that is at least $300 if not $400 in entertainment costs right there, plus nice meals, gambling (a little- no more than $150), shopping. After factoring in the hotel and airfare costs, we will probably spend close to $2,000 for the two of us to go to Vegas for 5 nights. I think Disney is the better bargain for us. Especially since we are able to stay at the Shades of Green.
P.S.- I grew up in the SF Bay Area- right behind NYC in terms of how much everything costs- I completely get your point about housing costs, etc. yikes!