I am anything but old fashioned, but I don't think being thoughtful of others is old fashioned in the slightest. A good friend doesn't boss her friends around, especially when it comes to something where money is involved. Not everyone has enough money to get by, even if it looks like they do. You can't guess based on someone's appearance. A good friend looks out for her friends' feelings, and this invitation (sent probably without realizing it) stomps all over her friends' feelings. You don't have a party as a way to demand presents. You have a party (birthday, showers, weddings, whatever) and if the invitees bring a gift, that's wonderful and kind of them, but a gift is not a ticket price you pay to get in the door. You have a party to enjoy time with your friends. And you never ask for money, unless you are in dire straights and you need a loan, and in that case you pay it back asap.
Gender reveals are a new trend that probably won't last. Honestly, though your family and friends *are* excited for you, no one is as excited about your pregnancy as you are. That's not me trying to be rude, it's just true. The rest of us are going to get tired of doing baby things pretty fast. I'd much rather the parents mail out a cute gender reveal *card* than make their friends, family, and co-workers take another Saturday out of their busy lives to come to a second baby shower for the same baby. Especially when you are at that stage in life when everyone around you seems to be having babies. That can turn into a scheduling nightmare for your friends. Even babies get seriously boring after the 5th party in a single month.
Being persnickety about gifts is just...a good way to make people resent giving them. I am a gifting nut. I adore buying/making gifts for my friends and family at the drop of a hat (hat? Did you say you need a new hat? What's your favorite color again?) but don't make me feel pushed into doing it, or take the fun out of it by telling me exactly what you want me to buy unless I asked you. I balked at the dollar store comment .How freaking rude do you have to be to imply that only items over a certain dollar amount will be accepted at *this* party? This isn't a potluck where you tell people to bring something of a certain type to feed a certain amount of people. If your guest finds something cool to give you and it costs 50 cents, that's none of your business. You aren't supposed to play The Price is Right with your gifts, trying to figure out the dollar amount they spent on you. You are supposed to enjoy the thought behind the gift and enjoy thinking about them when you use it, even if it's something small. We've probably all been seriously broke at some time in our lives. Don't make your friends feel left out because they don't have more than a few dollars to spend. You may find yourself strapped sometime and wish you had their largesse, just like they are hoping you might now.
Here's where my not-old-fashioned-ness peeks out. I was also annoyed by the fact that they insisted on "gender neutral" colors. Pink and blue gender associations are *not* written in stone. Heaven forbid your son's delicate skin be touched by a pink blanket! If you put a blue onesie on your daughter it will surely damage her chromosomes! If you are already that obsessed with your child's absolute conformity to gender stereotypes now, before they are even a fully made human...yikes.
I have great sympathy for you, Flasher, for having to handle this awkward situation. Don't let it get bigger than it is, though. She's just learning how to be a good human, like all of us. It's quite possible she will look back in a couple of years and cringe at the invitation she sent. Let us know what you chose to do. I'd, personally, skip the whole thing. Just be busy that day.
P.S. I never heard that it was weird to have a baby shower for each child. I thought a friend just held it for you if they wanted to and all you knew about it was when to show up and what to wear. I think someone held one for each of my mom's kids, but it was a different person each time. I chose not to have kids so I'm a bit of an outsider when it comes to being the recipient, though I planned one for a friend when she adopted her child.