It's interesting. I've been here for a few days now, and this Xmas/NYE week seems less crowded than past years. That's not to say the crowds are light or even average or that lines aren't insanely long, but to me, for whatever reason, it just feels like I have more space when walking around, can get FPs that would have been all gone by that point in the day last year, and can get on some rides without having to wait hours. Again, it's still unbelievably crowded (Soarin' climbed to a 180 minute wait today) but just slightly lighter it seems.
To me, it seems that going over the holidays only makes sense if you want to soak in the atmosphere, look at some shops, wonder around, etc... Going with the mindset you're going to get a lot of rides in seems like setting yourself up for the failure.
I was there on Christmas day many years ago and while I do remember much of it fondly, I also remember the 3 hour wait on some key attractions.
I think you can still get quite a bit done even during these busiest days of the year. That said, I wouldn't recommend a first-time visitor visiting during this week unless they had absolutely no other choice, but you can get a fair amount done; it just take more energy and effort than it would during a slower time of the year. Ultimately, if you get to the parks early, you can still hit many of the headliners. If you make your FP+s for later in the day, then you can also get on rides then too. In the meantime, you can see some shows, enjoy the holiday decor, shop, and eat. You definitely do want to manage your expectations, but I do think it's possible to still have a mostly typical WDW vacation during this period, although one that requires more effort and patience.
For me, I go in with an even more managed mindset. Honestly, I haven't woken up early at all this week. Instead, I get to the parks around noon or so, use my FP+s that I booked at home, use single rider queues, enjoy the holiday decorations, look for 4th FP+s or try to catch cancelations, shop, eat, and make a point of seeing all the holiday entertainment. That said, crowds don't really bother me. For me, because I'm lucky enough to visit multiple other times during the year, I only hit my favorite rides and try to spend the majority of my time seeing the holiday offerings, but in past years during this period, I've toured the parks with individuals who wanted to focus more heavily on attractions, so I've done it that way. I agree that it's all about managing expectations, but I also think a lot can be done during this festive (albeit crowded) time of the year with a little bit of strategic thinking and planning.