I was just thinking about this thread after reading one in which the OP's nephews never said "thanks" in any form for their gifts, so she's contemplating not getting them any more. It's sad, but sometimes that's what you have to do, I think--why bother to put more effort and time into someone than they're willing to put into you?
I think TY notes can get a bad rap early on, because (IME) parents often present them as a chore that children must do, and nag and punish them if they don't. And then I think some parents just don't want to go down that painful road, which they see as inevitable, so they don't emphasize "long distance thanking" at all--even parents who are quick to teach their kids to say "please" and "thank you" in person. So I think in some people's minds--I am speaking from personal experience here, actually--a THANK YOU NOTE becomes a big, formal thing that is totally separate from just... thanking someone for a kindness. And although they might gladly do the latter without thinking twice, there's something daunting and unpleasant (in their minds) about doing the former.
Somewhere I posted about how I would send gifts to my nieces and nephew, and get no acknowledgment in return. Once their mom sent me a note that said, "Thank you so much for all you do for the kids. I don't make my kids send thank you notes, but we really appreciate your efforts." That was good for a few months, honestly, because it was after all a TY note, and a nice, sincere one. But even if I chose to see it as a blanket TY note for all past unacknowledged gifts, I didn't see it as covering all future gifts, for years--"Oh, we sent her a TY note in 2003, it's still good, right?" She seemed to feel like sending TY notes, and instructing her kids to send them, was a philosophical choice some people made, that wasn't in any way required. (And trust me, the kids did not thank me in other ways, like by phone or email.)
I wondered if she had bad associations with writing TY notes from her own childhood; but whether she did or didn't, her choice to not teach her kids the importance of long distance thanking cost them not only material gifts from me, but also a closer relationship.