We have done both on-site and off-site stays. Off-site you can get a large condo or house for far less than an equivalent unit at Disney. However, if you compare the
total cost of a nice off-site condo with a Value or Moderate hotel room on-site, you may find they are nearly the same. Be sure to consider car rental/fuel/tolls/parking vs
MDE, all taxes/resort fees/cleaning fees, food costs, and discounts like free dining or stay/play/dine. Off-season rates will differ too.
In September we had a wonderful stay at POR at a low-season rate with free dining, and the
total cost was a little less than our usual off-site condo resort - considering we would have needed to rent a car, buy gas, pay tolls, parking, and buy food. The POR room was much smaller, yet we enjoyed being in the bubble. With MDE, off-season rates, and a discount, Disney pricing can get pretty attractive!
However, the WDW stay/play/dine offer for this winter was more expensive, so in February we will be at the off-site condo (Bahama Bay Resort) - and have a car ($160 for 8 days, including their crazy fees) so we can do other things.
We will not stay in an off-site
standard hotel room again. I'm pretty cheap, but not so cheap as to ruin valuable vacation time in a dump. Of course not all Orlando hotels are dumps, but we have found a few too many.