Yes and no. I think you have to be careful on what you give your kids because you can "afford it." We've been careful and our son still has a slight case of affluenza. I don't think my kids will leave home, go to college, get their first job, and be able to throw catered parties - so even though we could, we pick up our fruit and cheese trays at Costco for our parties. If this is a pattern of indulgence, you aren't doing any favors to your kids - unless there is generational wealth. If its a one off thing, then it can be fun.
(But a fifteenth birthday for a girl is a HUGE deal in Latino cultures - bar mitzvah or high school graduation or even a small wedding huge).
I agree with you here! It is something I frequently think about for my own kids...When I got a gift as a child and it was a 'big' gift - probably only happened once or twice and it was a BIG deal. I think about how different it is for my own kids and they just can't feel that same appreciation as I did back in my day. They're thankful - but it's just not the same. So I very deliberately keep number of gifts (and $$) very low for my kids for CHristmas and birthdays.
As for cakes - I know a lot of people do it for not just the big ones - they'll spend quite a bit on any birthday (4,5,6 years old). A FB friend of mine started a baking business and frequently posts pictures of her newest creations and they're all for people on our town. I think her prices are reasonable but I just don't see the need for the elaborate creations. And I agree that there is a lot to be said for keeping it more basic and not getting them used to 'over the top'. Now, for the posters who make their kids own cakes and give them their own time to do so (as opposed to $$) - I think that is nice if you have the time and talent.