We've done Disney every which way (offsite condo, onsite value, onsite moderate, onsite deluxe, offsite hotels of various 3-4 star level). Even owning DVC, we STILL stay offsite for arrival weekends and weekend trips. I honestly like both options - but that said, I'll say that I
always Hotwire or Priceline my offsite stays.
PROs to staying Onsite:
If you are doing a meal plan, you can really do an all-inclusive stay.
Disney Transportation saves lots of hassle - and money since you won't pay for parking.
Resorts are themed and just more magical - friendly CMs, you feel like you never leave Disney.
Convenient for breaks.
PROs to staying OFFsite:
Honestly, if this is a "once-in-a-lifetime" trip and you are planning to pack it all in and be in the parks from rope-drop to fireworks, you are better off staying OFF site because you won't be spending time eating/swimming/relaxing at the resort - it will mostly be a place to crash.
That said - you can get a much bigger and more luxurious room (with much nicer beds/linens) at a five star deluxe resort for what the values cost.
With Hotwire/Priceline -
For 60$ a night, we've stayed at the DTD Hilton (with character breakfasts, park shuttle, and EMH benefits).
For 75$ - we stayed at the Peabody (home of the Peabody ducks, and with complimentary water bottles. duck-shaped soaps, robes, real bath mats and a flatscreen in the marble bathroom)
For 85$ - we've gotten Gaylord Palms (on par with any Disney deluxe for sheer magic) and at the Grand Cypress.


These were
really nice resorts, and were either the same price or cheaper than a value resort.
For me, paying the big $$ to stay ONsite makes sense only if you are planning to:
1. Take advantage of a promotion like buy 4 get 3 or free dining.
2. Purchase an all-inclusive package w/dining included.
OR
3. Spend day times at the resort (off days, nap breaks)
Otherwise, staying OFFsite can be every bit as wonderful - and a good deal friendlier on the pocketbook.