If you're staying for a week or more, a one night deposit might not be considered unreasonable, but if you're staying at a given hotel only for a day or two, the deposit is excessive. Either way, the policy is a pain, and a financial burden. You can certainly find a less expensive room just outside of WDW's borders. However, make sure you consider parking, gas, commuting time, and convenience when you make your decision. Offsite Hotels Orlando has more hotel rooms than any city in the World with the possible exception of Los Vegas.
Rooms vary from small but nice to dirty and dingy to the major chains.
Let the buyer beware is a good motto to keep in mind. If you don't have the budget to stay on-site, there are three places I'd suggest you try to find any necessary information. There are many reviews by people with different taste and expectations, so you're sure to get a well-rounded viewpoint. Offsite Hotels near the Disney Parks - gives reviews of nearby hotels submitted by guests. When the Trip is Done Information on MouseMemories.