Around here, every single wedding I've ever been to has had a cocktail hour followed by a 4 hour reception, with an open bar for all 5 hours.
No, wait. There was one about 10 years ago that had no liquour. Both the bride and groom were members of AA.
Every other wedding-- including another AA wedding I went to-- had 5 hours of an open bar. (No, there was no champagne toast.)
It's absolutely a regional thing. There's no one "right way."
Well, the Tri-State area seems to have its own very specific wedding traditions, as we know from past threads. Based on what I've seen mentioned here, and my own experiences with family in the area, bucking local custom in regard to weddings seems to be regarded as a lot more outre there than elsewhere in the country. (I think that a lot of the reason has to do with available wedding venues and the way that they are run; elsewhere in the country venues are usually not so strict about selling only pre-set "packages" for events.)
Most of the time, the phenomenon of the dry wedding is squarely a religion-related thing. You probably have never encounted it because you just don't have that many practicing Southern Baptists or hard-line evangelicals where you live. They are a distinct minority there, and if you are not part of their church circle you probably would not know them well enough to be invited to a wedding. Small minorities in any community tend to stick together socially.
I grew up in South Louisiana, which unlike most of the South is majority-Catholic. (Also, FTR, unlike a pp, I know a LOT of wealthy Cajuns: oil leases are quite lucrative.) However, there are still sizeable contingents of Baptists and evangelicals in the area, so we do frequently get invited to their weddings.
Trust me, while we expect to drink (for free) at Catholic and Jewish weddings, we know that we won't find liquor at the Baptist or evangelical weddings we are invited to. Unlike recovering alcoholics, they don't just regard avoiding alcohol as a personal choice; for devout members of these faiths, any association with alcoholic beverages is deeply offensive. Several members of my family have been involved in the wedding industry there for decades, and IME, not only will these folks not serve alcohol, but as a general rule they will try to avoid holding a wedding at any venue that holds a liquor license. To them, all of the events surrounding a wedding are very much sacred occasions, and any taint of alcohol at the reception would cause the Pastor to refuse to attend, which would be a very embarassing thing in that community. This is a part of the reason why so many of their churches have large and well-equipped fellowship halls for events like these -- the whole issue of alcohol-avoidance is simplified.
That said, I have to comment that the average S. Louisiana Catholic will usually make secondary plans for a night out AFTER attending a Baptist or evangelical wedding, especially if it has been a more formal one. These weddings seem bizarrely abbreviated to our way of thinking: most of the time the entire event, including the ceremony AND the reception, is shorter in duration than the average Nuptial Mass. If you are used to Catholic weddings, the end of a Baptist wedding tends to leave one with a strange feeling of being all dressed up with no place to go, so usually, we go somewhere else afterward and make a grand night out of it.
I also have to comment that at very casual weddings in tiny communities out in the country in the South, there is almost always a fair-amount of parking-lot drinking at weddings not held on church premises. The not-so-devout very commonly stash a cooler of beer in the trunk of the car and go outside to drink.
Also, speaking of beer, in communities where historical venues are commonly popular locations for weddings, it is not unusual for such venues to prohibit the serving of beer, normally for cleaning-related reasons. The 18th century house where I held my reception had this rule: spilled beer is very hard to remove from antique flooring and carpets, and even after you clean it up, it tends to leave an odor, especially in warm climates.
PS: I have to agree with those who say that the RECEPTION should be about the guests, although traditionally, at a wedding the Bride & Groom ARE guests, because traditionally they are not the hosts: their parents are. That said, they are by no means the ONLY guests, and I think it is the height of unpleasant self-aggrandizement to skimp on food, beverages and/or entertainment in order to spend more on the decor or the clothing of the bridal party. At a party of any kind, the comfort and enjoyment of the guests should be the paramount consideration -- it is not a performance, it is a celebration. The types of entertainment and the types of items served may bow to ethical and religious obligations (for instance, just as no thinking person would expect to be served shellfish at a Jewish wedding, it should come as no surprise not to be offered wine at a Baptist wedding) whatever *is* provided should be provided generously. Do not offer options that you cannot afford, but if you are going to invite guests to celebrate your marriage, do your best to provide generously for their enjoyment within your means. If you can't afford to do that, then have a private ceremony and just have dinner at home with those closest to you.