[klochner]

It's not any more ridiculous than facebook virtual gifts that cost money:

"So I can pay facebook $1 to send my friend a virtual beer that he can't drink?"

Both are arguably ridiculous to any (hyper)rational person, but people are not rational.

[wallabe]

It's no more ridiculous than a normal gift card: "Wait, you paid $25 so I can have $25 that can only be spent in one location?"

That's a cost right there...if flexibility had a price I'd bet it'd be >5%.

[DanielStraight]

No more ridiculous than a normal gift for that matter. Giving a purchased gift at all is trading $25 for an inflexible $25.