We used to stay onsite--even owned DVC. But, we realilzed we could stay for a week offsite, on just our DVC dues.
I think a lot depends on your particular situation. We're a family of 6 who value our down time. My kids don't care much for eating in restaurants. My gang would rather spend a lot of time, having burgers by the private pool, than standing in line for yet another ride. This is a personal preference. Also, my gang isn't a 24/7 Disney type of family--we also visit Universal and Seaworld. Also, my kids are 5-16, making things interesting when choosing rides and stuff.
A family of 4 or less, that loves Disney Dining and commando touring would probably be miserable offsite. And probably wouldn't consider it such a bargain, with the various discounts you can find onsite. It's nice that there are so many options out there.