Exactly. I don't think anyone would argue that, in a vacuum, the deluxe resorts would be overpriced for what they offer. But that's the point...they aren't "your average Hilton/Marriott/Hyatt". They are very nice resorts on WDW property within walking distance to WDW parks. Their location, theming, and being in the WDW bubble are why they are priced how they are. People are willing to pay what they do for the deluxe resorts because of those things. That's the entire core of "Why stay on property" discussion. Some people just look at brick, mortar, and price. Those people don't seem to care about the "magic" of being in the WDW bubble. And that's totally fine, to each his own.
But so many others do care about the "magic" and are willing to pay for it. Those people see beyond just the brick and mortar and really enjoy the theming and all that comes with staying on property. They are willing to pay a little more for it. They love everything about staying on WDW property and will probably never entertain staying off property. That also is totally fine.
Neither "side" is right or wrong. Only concerned about feeling like you got a good deal or value? Stay off property. More concerned about being immersed in the WDW experience? Stay on property. But the question posed in this thread ("Why stay on property") has many valid answers that justify why to stay on property. Just my $0.02. As a side note, that's why we bought into DVC...the ability to stay in a deluxe room for around $260 per night. DVC makes staying on property a no brainer.