Another way of looking at it is that the DVC points schedules reflect peak vs. non-peak demand. If going during non-peak, your discount is that you "pay" fewer points for the same length of stay.
For RCI traders, the lower demand for units translates into more units available for exchange.
As I noted above, "free dining" is simply a package discount for cash resort guests staying on a specific type of package. There are considerably better deals out there in many cases, and using an RCI exchange, even with the exchange and resort fees, is a really, really good discount.