Very interesting thread.
I do this, but I have a lot of elderly rellies who live a long way away and whom I don't see from one decade to the next. So, for them, it's a nice way to see what the kids look like, etc. I do not send them either to people we see frequently (why?) or to anyone under pensionable age (cos I'm afraid of being throught cheesy). I should point out, bosscat, that my children are, of course, exceptionally gorgeous. I wouldn't inflict them on people if they were ugly.
This year my dds have made cards for their friends at school. They did a picture which we scanned and then printed off in suitable numbers. They'd have lost interest otherwise after the first two or three (they are 5 and 3). Is that cheesy too?