Does it? If you go for free dining, then you're paying full rack rate for your room and are required to add PH to your park ticket. If you go for the room discount instead, you pay less for the room, are not required to have a PH ticket, and can eat the way your family prefers to eat.
It's all a matter of family preferences. If you stay at a value resort, room discounts don't amount to much. You might come out ahead by taking FD ( but you'd have to pay extra to upgrade from QSDP to DDP). And if you use the PH option, then you aren't wasting that extra money either. Room only discounts at mod or deluxe resorts are more substantial. This is where you really need to do the math. You need to look at the sum total of both rooms (rack rate or discounted price), tickets (PHs or not), and food (DDP vs the cost of food if you ate where you want and how you normally would- not necessarily opting for the most expensive items just to maximize your dining credits).
There are families that manage to save money on the DDP by maximizing use of each credit. I doubt that they are in the majority of users, though. Not with the way it is currently constructed. I've tracked our food costs at WDW for our last few trips. We buy a few groceries and have breakfast in our room most days - it's just more efficient time use, as we get ready for the day. We eat a CS lunch - and sometimes split one entree and get an extra side, since portions are so big. We rarely eat dessert at lunch. We might get one snack in the afternoon, but not every day, and never 2. We do a TS dinner every night - a couple will be signatures. An appetizer and entree, with wine, but only occasionally ordering a shared dessert. And our costs come out well under the cost of the DDP. Oh, and we don't have to eat more just to come out even. We save money on the discounted room. And we don't park hop, so no need to spend extra for that.
As for those who say they do it for the convenience - what convenience? How is using DDP credits via your MB any more convenient than using your MB to charge to your resort account? Answer - it's not.
If you want to be fiscally responsible, there's no simple answer for everyone. You have to hunker down and do the math. The DDP simply doesn't work for every family.