Hi Emily!
My son was 1 1/2 and my daughter 5 when we went, and neither (including my wife) were that impressed. The luau for our family was just OK, and there are huge gaps in-between the more exciting stuff, such as the fire-twirling and hula dancing. I had to walk outside a few times with my "antsy" son, and saw a few parents also there, all with pre-school age kids. By the second half of the show, my daughter joined us when we walked outside and seemed to be having more fun there than at her seat.
The food was also just OK. The ribs were really good, but the sides weren't. The same with desserts. When my daughter didn't like the desserts, and she likes ALL desserts, I knew it wasn't just me :-)
If you've been to other shows with your kids, and they've sat through, I'd say give it a shot. But if your kids are "bouncing jellybeans" like mine, I'd find an alternative event to attend.
Good Luck on all your Disney planning!