I think this is becoming the norm, at least from what I see in our daily newspapers' obit section.
Sometimes, in liew of flowers, there is a request to a donation of the deceased favorite charity or somethng to do with the reason that the deceased passed away, (ex. Cancer, Alzheimer's).
But, I have also seen where they set up a bank account for donations to the family, or the children or it will state to help defray funeral costs.
I think that most people are now feeling that possibly spending money on flowers is a waste of time, so if you are going to spend money, why not donate directly to whatever cause?
I feel that this is sort of along the line of registries in the sense that if you want to do flowers, than do flowers. If you want to donate to the family, then do so. If you want to donate to a cause in the deceased's name, then do so. If you want to just send a card, then do that.