A friend of mine has stayed at one of those $25 a night hotels and he said it was just fine. One trip I was going down and actually had a free hotel through points but because I flew, the cost of car rental and parking made it so that it was cheaper for me to stay at a value and use ME.
One way to save is to plan your day so you spend the morning in the parks, eat a packed lunch, then go back to your hotel in the late afternoon for a break and eat dinner in your hotel/condo/cheap offsite place and then head back to the parks. CS in the parks isn't too bad - abt $5 pp if you split a meal/eat a kid's meal but you should be able to cook a big meal for both of you for under $5 if you had a kitchen.
I would also hunt down avg costs of eating out offsite as well.
It might work to your advantage to spend a bit more to get a place with a kitchen. The cheap place might cost you about $300 or so less - but will eating out more offset this savings? alternatively, if you will be eating out anyway, you might be worth it. I always end up putting together a spreadsheet. List all the costs of staying in a cheap hotel vs a more expensive condo
Cheap hotel:
$25 a night x 14 nights: $350
Food: estimate all your food costs keeping in mind you can't cook in your hotel room so you're more limited and will likely have to eat out more
Parking:
Gas:
Then do the same for a condo with a kitchen (incl. grocery costs for cooking in)
e.g.
Condo: $700 for 2 weeks (Pulling the number off the top of my head)
Food: $156 for 2 weeks. Breakdown: $10 for cereal and milk for all 2 weeks for both of you. $3 per day for a packed lunch for both of you (e.g. a bowl of cup noodles, sandwiches, hot dogs, etc), $5 per day for both of you for dinner (e.g. spaghetti, frozen dinner, etc), $20 for 2 weeks of snacks/drinks (pop, fruits, crackers, chips, etc).
Tickets: $310 x 2 = $620
Parking: $14 x 10 (for 10 park days) = $140
Gas: $400 or so?
TOTAL TRIP: $2016 for 14 days.
Then add a little more for misc. expenses.
For tix, unless you really want to do
MVMCP, might it not be better to do the waterparks and more add-on? That way you can go to the waterparks and Disney Quest on your days off from the parks - that will take care of the 4 days you don't have park tickets for.
Good luck!! It's quite possible to manage a cheap Disney vacation.