It was without a doubt the Free DP that rekindled my love affair with Disney World. A few years back I booked my first ever all-Disney Trip (did a lot of trips before staying off site). I got the Free DP and I was instantly transformed into a Disney Nut. Back then the FDP even covered appetizers and Tips!!

Since then its been nothing but 100% Disney Trips and last year I bought 190 DVC points.
I hate to see the FDP go because I am sure it is resulting in more folks discovery the joy of an all-Disney trip.

That being said I do concur that the FDP has negatively impacted the Disney Dinning Experience and maybe its time to do away with it (And no Im not saying this just because I am now a DVC member)
1: The FDP without question has impacted menu selection even for those paying OOP. Consider when the FDP was first introduced and included appetizers. Almost every TS offered Crab cakes appetizers. The Crab Cakes started to quickly disappear from the menus to the point where only the signatures offered them. Once the DP dropped appetizers, the Crab Cakes magically reappeared. My first trip to Boma they had what I considered the best Prime Rib Ive ever eaten. The Prime Rib has long disappeared. Now we see Flanks Steaks, Beef short rips and Lamb Shanks throughout WDW.
2: The FDP was originally offered in September to lure vacationers back after a couple of pretty bad hurricane seasons. As someone who typically goes in September I can tell you that the FDP has resulted in more September guests staying in the Disney Resorts and eating in the restaurants. But since it was offered only a short period of time during the year it didnt have the tremendous impact it has today with the FDP being offered almost year round.
3: I would image Disney is like any other corporation: Highly departmentalized. So yeah while guests getting the FDP are paying rack rates for rooms and there may be some budgetary provisions being made to the restaurants I doubt they are being reimbursed at the same rate as if the guest was paying OOP. It is obvious from the adjustments in the menus the restaurants have to make adjustments to compensate for a lost in revenue over paying guest.
4. It seems like to me you are starting to see at Disney a Vegas-Type economy. The paying customers have to pick up more than their fair share of meal costs in order to compensate for the comps.
All this being said I have yet to have a bad meal at any TS or Signature Restaurant at Disney. However the selection and quality has gone down and in my opinion will continue to do so.