You forgot free parking, Tim.
We have been buying Annual Passes for years and, for us, at least in the early days, it was all about flexibility. The first time we visited in 1992 (when there were only 3 parks), we bought the 4 day hoppers, which included some water park and PI add-ons. I think the next couple of times we went, the 5 day hoppers had been introduced. Once we'd cottoned-on to APs, it was such a pleasure to be able to dip in and out of the parks at will. Prior to that, we felt we had to plan very long days in the parks to make the most of our passes. Much as we love planning, to be able to just decide to pop into MK for SpectroMagic, for example, makes for a much more relaxing holiday. The same goes for the last day. In the days when we bought hoppers, there's no way we'd have 'wasted' a day's ticket to visit a park on our last day.
Since buying our first, we've never considered buying anything other than APs - the psychological factor of not feeling that you've somehow wasted a day if you just visit a park for a couple of hours is key. If we had MYW tickets, even if it worked out cheaper, I don't think I'd be able to get past thinking that I had to maximise each 'day'. To visit a park for a few hours and use one day's ticket seems wasteful. I'm probably over-labouring the point, but I'm not sure that I'm explaining myself very well.
The downside to APs is that they expire. Whilst we normally get more than one trip out of each AP, there have been occasions when we probably haven't made the most of them. Still, it doesn't take much for them to pay for themselves.
Another bonus (although you might consider it a downside) is that we've undoubtedly used the excuse of having APs to book extra trips. Even if you don't know that you'll definitely book another trip when you buy the APs, it's a fantastic feeling to be booking one knowing the passes are already taken care of.
On several occasions we've taken advantage of the AP rates to stay for the odd day onsite, even though we tend to stay offsite for the majority of time. The biggest 'savings' for us have been
DDP (20% on almost all full-service restaurants, including alcholic drinks), and, especially as we
do stay offsite, the free parking. If you're a golfer, there are also discounts on green fees.