The ADSO for grad school makes a lot of sense for the cadet who is looking for a leg up in the OML for O4 and the full 20. With little control over deployments, it is often difficult to get a masters completed on the side, especially if one develops a spouse and children along the way. The 2 years that can be dedicated to getting the degree completed allows the young cadet to focus on other things in his/her life career beforehand.
As to the continuation of the student loan ADSO option, the young Lt doesn't make much money to make much headway against any student loans taken to get his/her commission. To have that much debt wiped out for an extra 3 years, they have a great incentive to stay through their O3 promotion where withouth that debt, they rapidly growing pay is generally enough incentive to keep them in. Without that debt erased, the temptation to grab a higher paying private sector job afte the minimum AD requirement to pay back that debt so they can buy a house, etc. becomes a much stronger pull.
Now with the current outlook for private employment being weak, I could imagine the Army cutting back on that incentive as I am guessing that their retention rates are rising with the limited job prospects outside of the military.
During the ADSO counseling my son asked about the GRADSO for the graduate degree. The time owed back to the Army is a 3 to 1 ratio, 3 years for each year of Grad school, add 6 years to 2 years of Grad School and you are adding 8 years to your already 4 year requirement. He was first under the impression that it was only a 2 year ADSO for Grad School but was mistaken, he's not so sure about that option now since he was told it would be added to the extra time required for Aviation Flight Training should he be able to go as far with flying as he hopes.