I stayed both on and off-site and enjoyed both. These are things to consider:
Will you have a car? If you don't have a car then don't stay off-site. The shuttles are too limiting.
If you are flying and don't intend to rent a car then remember that you do have to pay for some kind of transportation between the airport and resort.
You have to pay for parking at the parks if you are not a WDW resort guest or if you do not have an annual pass.
You mentioned the off-site hotels you are considering but where would you consider staying on-site? There is a huge range of WDW resorts to choose from and a huge range of prices. Lots of people like the value resorts but I would rather stay off-site in a nicer place for the same money.
If it is important to you to have a place with a lot of room or a suite then it will be much cheaper to stay off-site.
If you are really, really on a budget then don't stay on-site. You will be more likely to spend more on food not to mention the room.
If you don't want to have to drive then stay on-site.
If you really think you will want to take advantage of the extra magic hour then on-site it is. But really think about it and make sure you would be able to take advantage of it. Figure out what time you'd be likely to get up, how long to get ready, eat breakfast and get to the park.
Lots of people say if you want to return to your room during the day (let's say for a nap) then on-site can't be beaten. I kind of disagree. I think that sometimes WDW bus transportation is not all it's cracked up to be and you can spend an awful lot of time getting back to the room, whereas taking your car can be quite efficient.
However, a case when I do think it is a tremendous advantage to stay on-site is when part of your party wants to return to the resort early. When you stay on-site everyone has a way to get back to the room. If you are off-site then you only have one way to get back so if someone wants to leave early you all have to leave or they have to come back to get the other half of the party when they are ready to leave.
Finally it also depends on when you are going. I find that if you go during value season the difference in price between on-site and off-site is smaller than during peak season. That is, the off-site resort prices don't fluctuate tremendously (though you can sometimes get some awesome deals) and the WDW resorts really soak you during peak season and are more reasonable during value season.