To be fair, with some of those programs, they are run through an organization that acts as a go-between, so the needy families may not know specifically where their "wishes" are going to. We've done this at work for holidays in the past. Each floor of our office (we occupied 4-5 floors of a building at the time) got a family to sponsor. Each floor was given a list of things each member of the family wants/needs, and a list of family members (but not names - just age, gender, and clothing sizes). In a case like that, several people could pitch in and buy the expensive item, and it wouldn't be so big a burden.
Also, whoever solicits the list from these needy people may be encouraging them to ask for what they really want. And quite frankly, I don't see anything wrong with that, especially if it's for a kid. And I know some will disagree, but I don't think it's necessarily a bad thing to let a young child (or anyone, really) be the recipient of some holiday "magic" during difficult times.