I have two kids, so I get my share of this stuff too. I used to make them "disappear" after they'd been laying on the floor for a day or two. In the last few years, one of the things I've started doing is collecting it and giving it to my sister. She does sonograms at a local hospital and keeps a "treasure box" for the boys and girls that need procedures. I do this with the unopened toys from happy meals too.
I know when my kids were in the early elementary years, their teachers usually had a treasure box in the classroom to let each child pick a treat if they had been good all week or some such. So once your kiddos have abandoned them and if they're in good shape (which they usually were because my kids would just get the candy and forget the rest), donating them to the teacher might be a way to repurpose them instead of trashing them.
This is a great idea. My mom is a teacher with a treasure box that she mostly stocks from garage sale McDonald's toys she can get 10/$1, but she loves donated stuff, too.
I'm 26 and recall party favors (usually very small) at any party I went to before about age 10, and some after that even.
My best party was probably my 7th, when my mom got ribbons and fake flowers and sequins and really cheap, big floppy straw hats, and each girl got to decorate her own straw hat to take home. We also gave each kid a "feather boa" (just a length of that feathery stuff you can buy at the craft store, and decorated our own cupcakes.
One year, my brother and I had a joint party in our backyard with an Aladdin theme. We did a "sandbox treasure hunt" where my mom hid tons of coins -- mostly pennies, some larger but only a couple of quarters -- in our sandbox and all the kids dug for buried treasure. Cost about $5, and every kid got to go home with MONEY.
Other good treats: Bro's "James Bond" party where every kid got a squirt gun; my "make a bracelet" party; the luau with cheap leis and "grass skirts" (we taped crepe paper on yarn) for everyone.
Some years we did candy and trinkets, but most years the take-home tied to the theme.