It is a custom because it has traditionally been one way to figure out how much to give a marrying couple. It is not the only way, and when the economy was better, it probably used more frequently as a guideline. I think most couples I am familier with have a more "$100 for a friend, $200 for a family member" kind of thought process. I don't personally agree that I would automatically give more to a couple who was having their wedding some place "nicer". I have two friends getting married in the next 6 months, one at a swanky hotel/resort, one at a reception hall. They're both getting the same amount, and I know for fact that 'covering our plate' for the one would easily be 3 times the amount of the other.
For a lot of couples, the reception is paid for long before the gift checks are cashed (or paid for by parents). The gift money is used to start out their new life, not pay off the reception bill.
I was trying to think of a comparable example. When you start a new job, you tend to gauge your apparel choices on your co-workers. Does everyone wear jeans? Do all the women wear knee length skirts? To all the men wear button-up shirts? The manual might say "business apparel", but if everyone tends to be on the most formal side of business attire, then that's what a lot of people will do to fit in, even if dockers and a polo shirt would be completely acceptable. If most people at a wedding are covering their plates, other people feel obligated to cover theirs, even if a $50 check would be just as acceptable/welcome. Or maybe your kid's class makes a big to-do about birthdays, where the other parents host bowling parties or pool parties. Are you obligated to do the same for your child? Of course not! But a lot of people will, since it is the custom.
Ress