Hi Carik,
Like you, I wonder how Disney can charge so little for children using the Disney Dining Plan. I have used the Disney Dining Plan quite often and definitely believe that there's no less expensive way to feed children while on vacation at Walt Disney World.
You didn't mention which Disney Dining Plan you chose for your family, but I'm guessing from the price you listed that you have the traditional dining plan that includes one table service credit, one quick service credit and one snack per person, per day. Let me explain how this plan works for children nine and under. If you use a quick service credit for breakfast, the child gets one entree and one beverage. If you are redeeming a quick service credit at lunch or dinnertime, the child gets one entree, one beverage, and one dessert. A child's table service credit can be redeemed for one appetizer, one entree, one beverage, and one dessert. (Keep in mind that if a restaurant offers a chlidren's menu, then the child must make their selections from that menu). Another great option is to redeem a child's table service credit for a buffet. Then the child can pick whatever he or she wants. More details about the various Disney Dining Plans can be found
here.
Let me know, Carik, if there's anything more I can explain regarding the Disney Dining Plan. I love using this plan and would be happy to tell you anything you want to know about it.
Best wishes to you as you plan your family's grand Disney adventure!
Jill