Yes, DC has recently changed the management company. The fees are now much lower, and are at least in the same ballpark as the best plans. Not quite as good, but close enough to not really matter.

If you don't mind the extra hassle of dealing with DC plans when you might want MD ones later, it's probably worthwhile. You can deduct up to $4000 per year (or $8000 if you are married and you and your spouse both have accounts.) At a 6-9% DC taxes, this saves a few hundred dollars a year. You have to keep the money in DC for a few years, but then you can rollover to another state.

You do need to file DC taxes if you intend to return to DC. If you are moving overseas, it might be worth seeing a tax professional to move your residence to a zero income tax state like Florida or New Hampshire for when you are overseas. Big money saver. If you do that I guess you can fund a 529 plan for any state since you won't be missing or getting the state tax benefit.

We live in DC. We might be posted abroad for a couple of years next year; when we come back, we would go to MD. Is it worth opening a 529 in DC and get the tax deduction this year and next? (Not sure if we need to file DC taxes while abroad). I heard bad things about the DC plan, but it looks like it has been improved in recent months. Any recent experience?