I agree with you, with the exception of holiday gifts to people like my trash collector, paper delivery driver and letter carrier. I give them gift cards because I don't know them well, and because they may get a lot of useless gifts from their many customers. Sometimes home-baked items are nice for them too, though. It shows you put a little effort into it. Like cookies with a coffee shop gift card.
I give gifts that show I actually took some time to think about them, and I include a gift receipt. If I am giving gifts to my nieces who live 3000 miles a way, I always buy at a chain store that has a branch near them, or I buy on line from a major catalog company like LL Bean. This year I did send my niece one gift card to Bed Bath & Beyond specifically because she had just moved into her first apartment and I knew she needed stuff to furnish it. Otherwise, I agree with the previous post about "why don't we just sit around and pass out $20 bills to each other" - excessive gift carding says "I don't have time to think about you or shop for you, but I can manage 30 seconds to run in and throw some money at the courtesy desk." And you are right about the amount just staring them in the face.
One other time I think gift cards are appreciated is by graduating high school seniors - they have huge expenses for college. Even then, I try to give a gift card for their college bookstore, to make it a little more personal. I also sometimes buy something like a college t-shirt, knowing they can exchange it when they get on campus.
I think your husband's viewpoint reflects a societal trend - we don't think we know people well enough to choose something, and gift-giving becomes more of a transaction. We have to get back to assuming that people might like what we choose, if we put thought into it, and also that they are gracious enough to be pleased that we made the effort. We are getting more and more impersonal these days - people send e-cards because they don't actually have to go out and choose something and write a personal message and find a stamp. Like that's really so hard to do? And when kids (and adults) get a gift card that took zero time to choose, they don't feel they need to take the time to actually write a thank you note. Our manners are declining, and I think that's a shame.