I think it depends on the kids. Mine are used to eating out a lot, and were fine with our wait and the length of the meal. We had a 7:30 AR, arrived late (maybe 7:45), were seated at about 8:00 (outside, but in a spot without a good view). We were done with our meals just before 9:00 Illuminations, the waitress brought us down to a little VIP viewing area to see it, which was already fairly crowded, but some nice folks let my 8yo stand in front, so she could see, and dh put the 2yo on his shoulders in the back, so she could see. When it was over, we went back to our table for dessert.
With the VIP viewing area, I wouldn't worry a bit about where you're seated. I mean, request an outside table because the table might have a good view, but it's no big deal if you don't get it.
Besides, any table service restaurant (other than buffets) is going to be as long a wait and as long for service. It's definitely worth it IMO to watch IllumiNations without waiting for a decent view out in the park. You might as well eat while you wait, you know, kill two birds with one stone. Of course, we also love English food. I guess for people who don't, it may not be worth it.
Good luck and have a great trip!