I do the Book People books, have made my own bags so far (can't be bothered with that this year, as have just had DD3 and am too busy), then just put some bubbles in too, and gave each child one of the balloons from the bunches we had decorating the room. This went down well each time, and didn't cost too much.
Other mums have done a bag of compost, small pot and cress seeds (with instructions), or small craft kits, or colouring kits, sometimes small cuddly / bath / sand toys for the little ones.
One party we went to had a magician, who made balloon shapes for each child at the end. I don't like gender stereotyping either, but most boys asked for a sword, while most girls had flowers. Only one or two children went for the gender neutral dog or hat balloon!
The mums I know aren't competitive, but generally don't want to buy tat that will break / choke baby siblings / go in a drawer of other tat. If I'm going to spend the money, I'd rather spend it on something that will last and be useful. I've never heard mums whinge about the contents of anyone else's party bag, though I have had discussions about how nice some of the bags have been (even though they weren't expensive).
My DDs (and most children I know) are grateful for whatever they are given, whether it is a bit of cake or a balloon, plastic tat (which they love), books, etc. If they get nothing, they are just grateful to have had a lovely time at someone's party. The children I know are not all angels by any means, but I've never heard anyone's DC whinge about it, maybe that comes later, as my eldest DD is still only 5 next birthday!