There is a financial savings, it's just that the savings isn't one size fits all. First, the more kids you have under 10, the better. It's actually a pretty good deal. The more people who can't take advantage of an adult beverage in your party the less financially viable it is.
Lets do some math. I've made some assumptions on cost per meal. Ticket prices aren't part of the totals, but you do have to upgrade to hoppers with free dining. Also assuming you are upgrading your free QSDP to a DDP.
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This is assuming that you are matching the eating habits of a DDP person (1 TS, 1 QS + 1 Snack) a day. If you're not or you don't want to, then it doesn't matter anyway.
Free Dining vs. Rack rate saves you $118.00 at a 30% discount at $350 a night. Assuming the food budget above is correct, the inflection point where a Room Discount and Free dining are equivalent is at $415.50 for rack rate for a Family of 5. At $415.50 per night and 30% discount with NO KIDS, Free Dining is a net loss of almost $800.
Even with 2 Adults and 2 Kids you're now in the hole $264.00.
Alternatively if one of your kids turns 10, with $415.50 a night and 30% discount so you're not 3 adults and 2 kids, the Free Dining Offer is $50 more expensive.
HOWEVER!!
The one caveat here is Hopper Tickets. If you were going to upgrade to hoppers ANYWAY for your trip, you can put $475 of savings under the Free Dining banner in every scenario.
Weren't getting hoppers = have more kids get more savings.
Were going to get hoppers = typical family of 4 will save some cash.
The value prop gets better in ever scenario the cheaper your room. Disney Kids scale Free Dining better than any offer.
NOT INCLUDED IN CALCULATIONS: Refillable mug and potential cost of soda/coffee you would otherwise have to purchase.