We have a timeshare, and after 2 vacations in a 2bed/2bath villa, we have decided that this is the only way we are happy traveling. Our stay is 'free', we have to pay taxes/fee each year, but it is pretty inexpensive.
When I heard about the
free dining the week we were booked in our timeshare, I contacted WDW to see if staying onsite would be a better option. With 5 of us, for that week, the only option was ASMusic and it would have cost us $1800 for the room/
DDP.
I honestly don't think we will eat that much in food to make that package work for us. Our girls love the character meals, but it gets kind of hard to keep them all busy at a restaurant meal after meal, and sometimes we just want a bowl of cereal or a sandwich around the pool instead of having to plan every meal.
When we are at the villa, we do shopping for the week for around $150, usually including some alcohol for the adults. As we also drive, the only thing that can get truly expensive are the tix, and we are becoming more savvy about the plans and what works best for our family.
Little things too, I can do laundry during the trip, which some people might hate, but I only pack 1/2 the clothing, and I go home with all my clothes cleaned, priceless.

Also, the full kitchen is great for the juices/waters, etc, and planning snacks for the time in the park. We can bbq our meals (which we all love to do) onsite, and the resorts usually have activities for the kids and adults.
However, if I ever get down to Disney without kids one day, I might look into staying onsite for a few days, just for the convenience factor and to say I did it! Hmm, maybe GF????
Long story short, for us, the offsite offers a bit more flexibility and more relaxation for us, and it does seem to be a bit cheaper all things considered.