I can sympathize with needing more space to accommodate kids--we have six. We're in the process of buying
DVC (using the current SSR promotion); here's how we worked out how many points for us:
We plan on going to WDW every other year off-season and staying in a 2-bedroom for 6 nights (leaving out one weekend night). (Not that we wouldn't LOVE to go more often, but airfare adds up quickly for a family of 8!) DH and I also travel to Orlando once a year for a tradeshow (also off-season) without kids and so we plan to spend 3-4 weeknights in a studio.
The minimum number of points that works for our plan is 210. We'd really like to get 275-300 points to make the above work, but staying in a grand villa when travelling with kids and a 1-bedroom when travelling without them, but oh well...that's definitely not in my budget right at the moment

Maybe the time will come when an add-on IS in my budget.
Oh, also, this plan wouldn't work if we had to rely on going during school breaks. We're willing to take our kids out of school for a week every other year and fax/email in their homework every morning. For us this has worked well, and I can always rationalize something about EPCOT being "educational"...

Seriously, our kids' teachers/schools have been very supportive, and we're just unwilling to try to brave the crowds (and heat) during summer or other school breaks.
Is DVC the most economical way to go to Orlando? No way. There are plenty of other timeshares (mostly much cheaper than DVC, too, if you buy resale) or rental houses/townhouses/condos, etc. But for us, being on property is an integral part of the magic. So even though, for instance, we were able to rent a nice 4 bedroom townhouse the last time we went for about $110 per night, we found ourselves saying, "Hey, we came here to enjoy Disney, and if we're cutting every possible corner to save a buck, we might as well stay home, since we're not having the Disney experience we wanted."
Hope you can work out what will be best for your family! For us, DVC hits that "sweet spot" and will (we anticipate) be well "worth it" to us for many years to come.
Michelle