I'm far from experienced, but we really enjoyed staying on property in May. We stayed at POP and yes the rooms were small. They were clean, cool and comfortable. We literally parked our car and only moved it when we spent a day at Seaworld. The bus service was fine and we only waited a semi-long time once...after Wishes one night. We didn't have to fool with traffic, parking fees or remembering where we parked. Price wise, for 2 adults, we had a hard time coming up with reasons *not to do it. Sure, lots of places appeared cheaper until you factored in resort fees, parking fees and whatever other fees they tacked on to the rate. We also took advantage of AM EMH as we are naturally early risers. And, we could hear Illuminations each night as we settled down to sleep...probably could have seen the higher bits of it had we wanted to go outside.
Now, if you're a larger family or bristle at the idea of a "value" resort, your experience and needs may be different. If you need 2 rooms or a suite, cost is going to go way up for you and an offsite hotel or condo may make more sense financially. Honestly, it all boils down to what works for you, your family and your budget. For us, on site is where we want to be.