We used to go all inclusive when we first started going abroad with the children and it served its purpose. As they grew up and moved on we went to half board then bed n breakfasts and eventually to just self catering (this was in other countries). We have mostly done self catering in Cyprus but back in 2008 when everyone was saying how going into the Euro had put prices up by 10,20,50 and even 100% (which wasn't true) we went All inclusive..
"the food was ok" yeah it was, but I don't do ok, I'm a keen cook and do a lot of meals at home and even while on holiday so "ok" isn't really what I want. We found ourselves eating in at the hotel for breakfast, maybe lunch but after a few days we had enough and started going out and about to get meals that you talk about with comments like "oh you should have seen this..", "it looked like a stew but oooh what a flavour, you really need to try some".. "I had this on holiday and had to make it myself for everyone else to try"...
ALL INC and Self catering will both have good and bad points, both will be great holidays, but they will be
different holidays.
All inc you find yourself more tied to the hotel which is great if you have the little ones with you and like to spend most of your time by/in the pool, at the bar (this I don't mind

) and generally using the facilities (gym, tenis, games machines etc that the hotels might offer) with no real worries about costs so you can tell them to get another drink, get some lunch, not get some lunch, get a snack etc.. and no pressure about meal times (we found we used to get up for breakfast but the kids didn't want it, so they would have a mid morning snack after swimming around for hours, we would then get a bit of lunch but they wouldn't want any. They would then get something in the afternoon etc.. they were on holiday just like we were, so as long as everyone was fed and watered I wasn't going to stress about when they were actually doing it (as long as it was decent food and not 10 icecreams a day with 20litres of sugary pop)
Self Catering you spend more time going out and about looking at different places to eat, talking to other people about places they have tried, talking to the bars/café/restaurant owners about life and such.. You also find you can get up when you want and if you fancy going to the beach at 7am you can. You can then go for a breakfast at 10am if you like (where ALL INc you tend to have to get up and go to breakfast in your allocated slot). You can then decide to go and explore the area, hire cars etc and go and look around, maybe miss lunch because you aren't hungry (in the heat) and then find somewhere nice for an evening meal...