I think its all realitive. The first year, we bought my son 1 present - a thomas push train. Last year, we bought him 4 or 5 small gifts (I'd say we spent between $60 - $80). This year, we purchased a big gift and a few smaller gifts (spending about $150). So we have progressively spent more, but I still think its within reason. He needed something to work on his gross motor skills and help get out the wiggles in the winter, some new challenging puzzles and some art supplies. We got some music instruments for his stocking (egg shakers, etc.)
If I made $250k a year and had a complete playroom, I can see spending that much to outfit it with some really cool gear. But I don't and we can't so we spent more then I had thought, but it also was through co-ops and over a few months.