I think that managing expectations is important, as is communication, and on this topic there never seems to be any - just resentment and hurt, which is such a shame.
As I said upthread, I can't explain it, but the people who might understand why the change has happened (the youngsters) aren't being asked. In fact in many cases they are being cut off from future presents, so the givers will probably never find out. That does feel (to me) as though they are doing so for themselves, rather than for the recipients.
Social changes mean that for many people, life has changed radically when it comes to consumer items. When I was a child, adults were always giving us sweets, much to my mother's irritation. Mum would always make us keep them for later rather than gorge on them when we got them, but we were expected to be very thankful to the aunts and uncles who had rooted in their bags or pockets to find a sugary treat for us.
I asked my mum about it and she said it stemmed from the war when sweets were rare, and from the rationing that followed. The aunts grew up when sweets were a real treat, and givers of them were seen as treasures. That was all entirely beyond my experience, so I just didn't understand why I was supposed to be so grateful for a hairy barley sugar, or a chocolate bar that had to be shared with my siblings. Times had changed.
At the same time, I remember when toys were only given on birthdays and at Christmas, so they were a real treat. By the time my children came along (90s babies) things had changed beyond recognition. Toys were readily available and living standards had risen, so they got toys all year round. Whilst they were brought up to thank those who gave them, they didn't look after them as carefully as we did, as they knew that if they got lost or broken there would be more. It was nobody's 'fault' - just that we, along with many members of my generation, wanted to give our children more than we'd had. I think that's natural - my mum's generation had done the same, but as they were war babies the bar was much lower. To them, giving sweets was a big treat, so they expected big thanks. My mum was always telling me that my children 'had far too much' and wouldn't be grateful for what they had, but I didn't want them to be grateful - to me, gratitude is not the virtue that my mum considers it to be, or not when it comes to consumer items, anyway.
I wonder if this is what's happening now? Children and teens have so much more of everything (if they are lucky - obviously there are many people using foodbanks and live in poverty) so they don't see them as as a big deal as the givers do? Maybe we are superimposing our generation's values onto a generation that just doesn't share them.
It's a shame, as grandparents get hurt, and the children may have no idea why they are being cut off, or treated differently from their siblings or cousins. I suspect that in 20 years the Christmas extravagances we are used to will have died out, much like Christmas cards are doing. If that happens and I'm still around, I'm sure I will miss it, as I remember Christmas as being about excitement and anticipation, and would like to pass that down the generations, but depending on how life pans out between now and then, it may no longer be appropriate to do things the way we used to. Life changes. Even those who used to insist that writing and sending cards was about 'being bothered' are now saying that stamps are so expensive that they are not 'bothering' to send as many, showing that it wasn't about the 'bother' at all.
I really can't get on board with a 'one strike and you're out' policy for family, though. That feels very transactional to me. I agree that manners cost nothing, and would never leave a gift unrecognised, but at the same time, I am aware that you can't buy love.
It might seem simplistic, and the young people may not understand what the fuss is about, but if I had given £50 to a teenager with no recognition of it, when I saw them I would talk to them about why not. The chances are that both of us would learn something from the conversation.