If she meant wedding showers then I apologize for the misunderstanding.
As far as hosting your own wedding/birthday goes- I guess I'm more relaxed than some here, but the only time I see it as rude is when the host is demanding gifts (registry in invites anyone? ) or demanding that the guests compensate them for the activities.
I agree. I wouldn't mind paying for a drink for the birthday person, or chipping in for part of their meal; however, it would be quite rude if it's *expected* that we all pay for something (besides our own food and drink, of course).
I also think "chipping in" should only be done if that's what the group always does. I went to a dinner organized by the birthday girl - the group always went Dutch on everything. We had had other members celebrating birthdays before, and we always did Dutch. This time, though, the birthday girl first passed the check to others without even looking at her share; then, when someone divvied it all up (we all ordered within a dollar or two of each other, so it was no big deal), she said she "forgot" her wallet and looked at us expectedly. We begrudgingly paid it up - what else can you really do?
Unfortunately, that was the last time the group ever celebrated anyone's birthday like that.