The point of the deal is to get people there and fill 'seats' for a longer period of time so your'e there to drop money in the parks. It is a HUGE savings for a lot of people. They dont generally do things to save people money for no reason other than to save them money. 7 nights is usually shorter than I would stay there, so its great for me. The point wasn't to slash prices, but to extend stays.
Its not a 'so called' great deal, its an amazing deal for a lot of people. If you go on a lot of short stays, APs and room discs are often an option.
Its still a better deal than free dining if you go in the first three months of the promotion for a week compared to free dining. Also, free dining doesn't save any money, its just convenient, thats been covered quite a bit. There are a lot cheaper ways to eat in the parks than using the dining plan. This is at worst the same as free dining if you get free dining, and if you want the cheapest vacation possible, stay at a value and dont get the dining plan. Its also not at free dining times during the extemely hot and humid part of the year.