We went to MDI/Acadia for a week last summer for our family vacation. Kids were 6 and 3 at the time. It was amazing! I wasn't sure what to expect, and honestly wasn't especially looking forward to it. The whole experience was absolutely spectacular. It's beautiful and there is so much to do for kids.
We stayed at the Bar Harbor/Oceanside KOA campground in one of the cabins. It had air conditioning, running water, a shower, toilet, a main room with a double bed (maybe queen, don't remember) and a little cubby-room with bunkbeds. Perfect. It's at the other end of the island from Bar Harbor and Acadia, but it's not a far drive and the island has a shuttle system that worked great (to avoid the hassle of parking in Bar Harbor). They also have campers and campsites if you are a real camping family.
Bar Harbor itself is an adorable little town. Mount Desert Ice Cream is named one of the best ice cream places in the country, and it really is. Do. Not. Leave. without trying something there.
Everything within Acadia National Park was great too, and they have lots of free kids and family programs. Definitely stop by the visitor's center and get the Junior Ranger booklet for your son. If he completes it, he'll get a real live patch that my kids still cherish. There are lots of short hikes that are absolutely doable with kids, and many of the really beautiful/famous sites are accessible via car and then a short hike.
Make sure to find out when low tide is, and go exploring on the "Bar" of Bar Harbor during low tide.
Go see this:
http://www.mainelumberjack.com/ I know it sounds crazy. Trust me, never in my wildest imagination did I think I'd see a lumberjack show. It was awesome. And the kids loved it.
This was one of the highlights:
www.divered.com It was a great boat tour absolutely aimed at kids. It's definitely not cheap, though, so it might not work for your trip this time.
Clearly we loved it. We'll definitely head back there in the next year or two.