At my uncle's third wedding, he begged people not to buy anything, as they were having enough trouble trying to pare down to fit two households into one house. However, people insisted on getting things anyway--my aunt and uncle would have done better to have had a list of small things--or of things from stores near them and thus easy to return. Others have tried charities, but they're not as fun--people want to give something fun to the new couple. Now that I'm fifty, I no longer have several grandparents who would want to spend loads of money on something special, but that's also an issue for many.
Now that I have a quite a load of clutter, I have great difficulty imagining any traditional gift I would want. Maybe if someone knew some brand of long-lasting sheets they liked. Otherwise, the only good ideas I had were things to help with the wedding, like my mom could make one of her fancy challas, my brother could DJ, my sister is always begging to help with the dress, my dad would be good with logistics, etc.
The silly prepared food ideas are great. I also used to give play dough in addition to my real present.
But to the question of whether it is normal--yes, it is. One of my friends explained that at Target they give you a gun-shaped price scanner, and they ended up going a little overboard because it was so fun to use the scanner. I don't think anyone expects to get everything on their lists--they just want to give people a lot of options.
But like a lot of other wedding traditions, yes, things that make very little sense and are super expensive are normal. You don't have to go for them yourself (unless your spouse or some other important party wants them), but just get used to them for other people.