Disney villas at OKW and WL and decided that we couldn't justify that kind of money for what boils down to a large hotel room witha kitchen.
While I agree the DVC units are quite pricey, I can only assume you've been looking at the wrong units to draw those conclusions about what is actually offered. To say a DVC villa is just a large hotel room with a kitchen is so incorrect that it is only possible to conclude you've made some type of error in your research.
DVC have four room sizes they are
1) A studio, this is basically a regular hotel room with a fridge, microwave and "wetbar" (AKA sink). Some resorts ( OKW) have two queen sized beds, some Boardwalk and the Beach Club have one queen sized bed and one (I think) queen sized sofa bed (not a bad option for a couple or a couple with a small child as it does offer a nice alternative having a propper sitting area, and obviously when in it's sofa mode it takes up a hell of a lot less floor space). These rooms in price are comparable to regular rooms at similar quality hotels, ie the rooms at BCV run about the same as a regular room at the Beach/Yacht Club. I'll guess these are the rooms you've been looking at, but think they are a one bedroom unit. This is a Studio at BCV.
http://disneyworld.disney.go.com/wd...id=BeachClubVillasResortGuestRoomsListingPage
Prices at OKW run from about $200 a night, but if you rent points off a member you can get them from about $80 a night
2) A "one bedroom unit". This comprises of a main bedroom (about the size of a normal hotel room) with a kingsize bed, an en-suite jacuzzi bath with a sink (areas about the same as most hotel bathrooms at OKW), a further en-suite "bathroom" with large walk in shower , a sink and a toilet, at OKW you get a separate laundry room (at the more recent resorts they have economised on space and have fitted the washer/dryer into a cupboard), you also have a fully equiped kitched and finally you have a living/dining room with a three seater sofabed, a two seater sofa, a "love seat" and a large dining table. Here is a link to a picture of the living room part of the unit.
http://disneyworld.disney.go.com/wdw/resorts/roomsDetail?id=OldKeyWestResortGuestRoomsListingPage and this is a link to the living area of a one bedroom at the boardwalk
http://disneyworld.disney.go.com/wd...id=BoardWalkVillasResortGuestRoomsListingPage
Prices at OKW run from about $300 a night but renting points will cost from about $160 a night
3) a "two bedroom unit". This is basically a studio and a one bedroom with an adjoining foor. Some 2 bedroom units are dedicated units. I.E. they can not be separated to accomodate two different groups/reservations. Some units are "lock offs" where the door between the units is in fact two doors back to back and each can be locked by it's own side.
Prices at OKW from $450 , renting points will cost from about $220
4) a Grand Villa. These sleep up to 12 and at OKW are about the size of a decent 3 bedroom semi.
Prices From Disney about $1,000 a night, renting points (in the unlikely event you can actually book one, they are hugely popular and in short supply) will cost from about $360 a night. By far the best value deal, but very limited supply and VERY popular.
N.B. When renting points Sunday to Thurday nights are at their cheapest. Friday and Saturday nights cost basically about 2.5 times as much as a weekday evening. So for example if a studio at OKW is 8 points ( points rent at about $10 per point) so $80 a night for weekdays it is likely they will be 20 points each night ( or $200) for a Friday or a Saturday.
There's no doubt that even by renting points using DVC is not a cheap experience, but in life you usually get what you pay for. There are cheaper options, but IMHO they don't offer the same quality of experience.
From what I gather the wilderness cabins could prove an excellent choice for you, anyone I've spoken to that stays there says it offers a really unique and pleasant experience staying on Disney. IMHO it's definately the best value option for a family that needs a little more space and/or privacy than a regular hotel room.