I haven't stayed onsite as an adult, and so I can't accurately compare it, but so far, we've loved staying offsite. Both times we've stayed close and both times we've had a car.
Pros:
1) cheaper, last trip us, my parents, and our 3 kids stayed in a condo for the cost of 1 Value room.
2) way more space. 1st trip we had a suite with bedroom and separate living area. Tons of room for dd's playpen, room to play, room to just move. Could put dd to bed, and stay up in living room with lights, TV, etc on
2nd trip we had a 3 bedroom condo. 1 br for us and baby, 1 br for 2 older kids, 1 br for my parents. 2 bathrooms, full kitchen. Tons of room for baby swing, and 2 families/3 kids worth of stuff.
3) Laundry, condo had a washer and dryer which was invaluable b/c baby soiled at least one set of clothes each day.
4) Never had to wait for a bus, or stand on a bus with a tired/sleeping child in my arms, or stand on a bus while someone else's child vomited on the bus and as the vomit rolled down the aisle with each stop of the bus
5) Got to ride under the Disney arches every day!
6) Had a microwave and fridge first trip for milk, snacks, etc. Had a full kitchen in condo. Never cooked a full meal, but we had breakfast in condo every day. Fridge and microwave are a requirement for me traveling with young ones. Suite included a full breakfast buffet every morning.
7) Travel time was very short. Friends staying on site said that when they factored in walks to the bus stops from room and wait times for buses, we made it into the parks quicker than they did. And that was the time we stayed in the condo, which was a bit further away than the suite. Neither trip did we ever hit any traffic.
8) Our condo was Disney themed, my kids were thrilled with it. I didn't feel that we were lacking any magic at all.
Cons:
1) No extra magic hours, but I don't think we would have used them much.
2) No option to get a dining plan, but I saved food receipts both trips and both times we spent far less than what a dining plan would have cost.
3) If I had older kids, the bus may be nice if we wanted to go to/leave the parks at different times, but right now that's not a factor.
I can't directly compare, but DH's best friend and my best friend (two different families) both stayed onsite roughly around the time of our first trip. They thought they "had" to to have a good trip. Both stayed offsite for their next trips after hearing about our good offsite experience. After their offiste stays (one in a suite, one in an offsite townhome w/ pool), both said they will never stay onsite again.