I was thinking about this carefully due to some threads recently disputing the duties/obligations of hosts and guests. It seems to me that there are several, potentially conflicting, definitions and whether or not a host is being polite depends heavily on the situation and precise role they are taking as host.
The first role is when you invite someone to your home (or space) and provide for all reasonable needs (food and drink, bathroom availability, no offensive speech/behaviour, a bed, appropriate entertainment etc) for the type of occasion, be it a dinner party, afternoon tea or a week long visit.
The second is where you are providing for some needs but not all, ranging from just the organisation of ringing round and finding a time when everyone will be able to attend, to keeping track of who is bring what, to providing a place for the event to occur, to making a booking, to paying something for everyone at the event (entry fee, restaurant food but not alcohol). It covers pot lucks, organising a group outing to the movies, all sorts of occasions where the guests contribute something beyond their presence.
I recall one story on the website where some young people organised a party for their parents but couldn't afford to be the first type of host (due to the number of relatives they had!) so had arranged for the guests to help with food, etc. IE. they were being host type 2. Their uncle then blasted them for this, saying they should have been the first type of host or give up the idea of the party entirely.
So, advise. Is it always rude to be the second type of host? It would seem strange. What would be the important things to remember? I think communication would be the key – if you are clear about the situation and what you really are inviting people to do, it isn't rude or tacky to have events where guests pay their own way, bring something or otherwise contribute. Am I wrong?