There is certainly a big difference between the cost of eating out and on your own balcony.
Plenty of great value Menu Del Dia restos around and well noted elsewhere on the forum, with some good ones shown earlier in the thread.
Typically less than 20E per head, including drinks, so budget 80E for eating a MDD out at a resto. If you do this every 2nd or 3rd night and have a nice spag bol, pasta carbonara with garlic bread, cooked chicken with salad in between you'll be fine.
Living like this means you can come in off a hot beach day and just chill out, rather than rush to put on your best gear etc, which becomes less fun if you do it every night.
We always go to the big Alcampo supermarket near Palma as the prices there are a fraction of Port prices...particularly regarding wine (which we drink plenty of), but also staple things like the 5litre waters etc.
It's easy to buy drinks, snacks, sweets and ice creams on the beach, but it will cost a premium which mounts up when multiplied by 4 of a family and the length of your holiday.
If you take these points on board, you'll feel more in tune with the place and can easily manage to have a great time on less than 100E a day.
On the other hand it is easy to say "who cares?..I'll spend what I like!" - in which case you can go mad and spend £250 a day!!
Have a great holiday!