I'm not sure why anyone is assuming that people that sponsor Over The Top parties do it in order to show off or outdo anyone.
I can very well see that it is done out of benevolence. They know that not everyone will come to them for a donation, and might find this as a way to give to everyone, even those that don't come for a donation. They might not even go into the details of what's done, but rather employ a party planner, and then they might or might not get involved in approving or disapproving certain details. If anyone is trying to outdo or show off, it's usually only the party planners.
As someone posted upthread, it's a matter of personal choice and education as to whether to participate in these parties or not. Based on my personal background, I wouldn't be attracted one bit to any such party (big or small). I'd much rather be at a meaningful farbrengen (or at a party where I can take my young kids and they would enjoy).