I'm not telling anybody they should or shouldn't go. I agree that if you want to give it a try, you most definitely should and then you can makeup your own mind. If enough people eventually feel the way the OP does, changes will be made.
That said, here's my opinion. Take it for what its worth.
We ate there for dinner about 4 weeks ago. The food was ok. Not great, and fairly small servings, but not bad either. Our server was average as Disney waiters go. He was fairly pleasant and attentive, but nothing out of the ordinary, good or bad.
I don't like the photo package. I don't like having to buy them because you have no control over what you are going to get, and you are pretty limited on what you can take. We had a party of 6 and got 2 poses.
I would much prefer the regular format, where they come to the table, or even the format used in the parks, where the character stays in place and guests can approach them. They could essentially do the same thing they do now, with Cinderella downstairs, and ditch the photographer. As I said, I prefer the "at the table format", but ditching the photographer (and the price for the pictures) would be a plus.
I'd also like to have a few more of the princesses, though I understand it wouldn't flow with the dinner show. Speaking of which, the dinner show was rather forgetable. Reminded me of a lounge act at times, with the fairy godmother asking for anniversaries and such. So maybe ditch that in favor of adding Aurora, Belle, etc.
There is something to be said for eating in the castle. That's definitely a neat experience in and of itself.
All in all, it's not that it was "bad". Its just that it wasn't all I think it could be, and the price was a bit much for what we got. We probably won't go back for awhile, until my daughter clamors for it.
But like I said, that's just for anybody who cares to read my opinion. Its not meant to discourage anybody from going. If you want to go, go, and have fun!