A lot of people will tell you staying offsite is not the same, then many on this board will tell you it's better! Let's see, for the price you mentioned for a small, crowded hotel room, you could have, a townhome, condo, or pool home in a 5* resort, with your own kitchen, 3 bathrooms, free internet, free phone, your own full sized kitchen, and more. Same cost, 10x better amenities, hence the one posters comment about "the magic is where you make it". We've never felt like we missed out on anything by not being on site, other than paying too much! LOL In fact, quite the opposite, we feel sorry for the poor people staying in those small overcrowded hotel rooms, forced to pay too much and eat out for every single meal, all so they can get an extra hour occasionally in the park....not worth it! (Unless you're rich!)
Many die hard fanatics will tell you "onsite is the only way to go"..and you will certainly hear a lot of that on the DISboards....but you would be doing yourself a huge disservice if you didn't at least look into the world of offsite housing and short term rentals near Disney World! There are over 75,000 beds available offsite in various resorts within minutes of Disney, all at much better rates than the traditional resort hotels, it's a big "Secret" Disney honestly doesn't want you to know about!
Before you listen to just one person's opinion, please, do a little research and checkout ALL of the options available...onsite is just one of them, I certainly respect people's opinions who feel that way, we just happen to disagree! With all of the $$ we've saved staying offsite we were able to take additional whole trips to WDW, now that's Magic to me!