$5600!!! We have always stayed between 6-8 nights at Deluxe hotels, bought a few pictures, done at least 2 character meals and at least one other nice dinner, spent $200-$300 on souvenirs and have never come close to spending $5000 on a WDW vacation. In fact, we have never spent more than $3200. Either Disney's market study is wrong, or we have been missing out! We are not big drinkers and eaters, and we always have a quick breakfast of cereal bars and fruit (which is what we eat at home plus we can get to the parks at opening easier), so that might help keep our costs down, but $5600 seems way off base.
Back to the original topic, I view FPs as an essential part of my park touring plans. Now, I don't need an all-day FP good for every attraction, the current system works just fine for us. We enjoy leaving the parks in the early afternoon and returning after dinner for a couple of hours. Thus, we use at most 4-5 sets of FP per day, but they are vital to keeping our wait times down to less than 5-10 minutes per attraction.
We bought
DVC b/c we wanted to stay at the deluxe resorts w/o having the hassle of finding this or that code, plus we wanted the kitchenette for the baby. We may use the points for a 1BR if we decide to only go once per year, but we will never cook full meals on vacation so we have zero need for a full kitchen (yes, the master suite and laundry room are lovely but we can "rough it" for a week if it means squeezing an extra week of vacation per year). If DVC members were ever relegated to off-site status or value resort status with respect to use of the FP system, we would sell our contract or always rent out the points and stay exclusively at the deluxes.
Now, all that being said, I think this is much ado about nothing at this point. BUT, if Disney is trying to figure out how to beat Universal at its FOTL game, then we could be in trouble. I think Disney tried with the Extra Magic Hours and perhaps they are not seeing the increase in on-site bookings that they thought that might generate. I think ME is also an attempt to increase the on-site bookings. Disney's problem is that they have many more rooms to fill than Universal. Thus, Universal can afford to have a meaningful FOTL pass since there is currently a limited number of on-site guests based on availability. If every Disney on-site guest got a FOTL pass, it might only create a meaningless second queue. I have never stayed at a Universal hotel nor been to a Universal theme park - perhaps when the kids get older but certainly not anytime soon - but it is my understanding that Universal only has 3 hotels and each one is comparable (in terms of price, NOT amenities, etc. as I know some have strong opinions on this) to a deluxe Disney hotel. Point being, if Disney is trying to offer a FOTL type perk to compete with Universal, it does make sense that only the deluxe hotels would receive it.
One question I would like answered though is Disney really having trouble with on-site occupancy? And if so, is it spread amongst all levels of resorts, or at a particular level? Based on my limited experience in trying to book vacations, the deluxe resorts seem to be doing pretty well and if so, I'm not sure we need to worry too much about this situation.
One final editorial comment, I understand Disney's desire to "democratize" the on-site properties with values and moderates, although I think the purpose was to simply capture the business of those staying at the chains and independents just outside the gate. That being said, I know Cadillac tried to "democratize" its luxury lines in the 80's, a strategy that totally backfired and enabled the German and Japanese luxury lines to come onto Cadillac's traditional turf and trounce the pants off of it. When I was a kid, we never stayed at Disney b/c we either couldn't afford it or my parents did not want to pay for the premium. Now, the American car industry doesn't understand that it is the product, stupid. IMO Disney still has a fantastic product - but it can't rest on its laurels. Spruce up those deluxe hotels, ensure the level of Disney customer service remains magical, keep your attractions family based but on the cutting edge of technology (Soarin, Philharmagic, etc.) and people will come. Try to save a few bucks here and there - like building Six Flags, carnival level trash parks like California Adventure, alienate your most loyal customers like DVC members with exclusionary FP gimmicks, and watch yourself become the Cadillac of the theme park entertainment industry.