In school, during the neurology unit, we were instructed to instruct our patients to NEVER limit a child under the age of 5's fat intake (the nervous system is still myelinating is the biggest reason) *except* in certain rare cases, and that one of the best sources for the fats needed are in whole milk. ((In large part milk is seen as the "best" option because it's laden with proteins and sugars and vitamins and minerals... so nutritional needs stay balanced.))
Like Susan, I always (and until very recently*) always fed my now 8yo son on demand. He's very tall, incrediably dense (he's had a 6 pack since he was a toddler, and the whole "braided back" thing), but has very low body fat most of the time. (He's the kind that chubs up and shoots up during growth spurts... so he'll get belly & cheeks for about 3 weeks and then a month later you're counting his ribs and vertebre). The only reason I've had to stop 'on demand' is that he's on a medication right now that is giving him the munchies. <rolls eyes> Oy.
My kiddo is on the upper edge of 'normal' as far as milk consumption. As an infant that was 20oz apx of breastmilk per feeding apx every 2hrs. As a 10mo-14mo old (lost my milk) that was 64oz of formula per day. And as a toddler - present = apx 1/2 gallon per day.
Kids LEARN bad eating habits the vast majority of the time. When they're still young, they listen to their bodies. It's been fun to watch how kiddo's eating and drinking changes over the years, seasons, and daily activites. And I've learned, as a mom, to really trust him when he asks for certain things.