While I tend to agree that since it's a bday party you should supply the pumpkins, I have a few thoughts/questions that put me on the other side:
1. You said that you've done this for several years already. Do the people bring large pumpkins? Several pumpkins? Is this the day that the family carves all of their pumpkins for display? Or do they only bring one small pumpkin for their child to carve?*
2. It sounds like this has turned into somewhat traditional fun party for your neighborhood. Depending on your answers to the above, I don't know that changing the rules by providing only one small pumpkin per child would be the way to go.
3. I like O'Dell's thought:
The other option (and what I'd personally be inclined to do) is to not make it known that it's a b-day party, and bill it as a pumpkin carving party. Proceed as normal and just have the cake as an extra surprise. That would mean no presents for the b-day boy, but so many kids don't need/want the gifts.
But that might surprise the guests and make them think that they did something wrong by not bringing a gift. ("Oh! You should have told us!")
I think you'll be fine with the guests bringing their own pumpkins so long as you kick it up a notch or two with food, games, kiddie prizes, etc.
*If the norm is that everybody brings only one small pumpkin, then I think you should supply the pumpkins.
QueenofAllThings posted while I was typing . . . I agree with her.