I've been to many many weddings with the "dollar dance" and to me, it's like a tradition! I personally don't see anything wrong with it. However, I do think it would be a little out of place at a reception that is more elegant and serious, rather than fun and a celebration! (sorry if that didn't come out right, no offense intended.) I think it's a great way for the bride and groom to get to see more of the guests and have a chance to chat with them for a moment. I also remember it being very fun for the little ones running around. It's a good way to include them and make them feel more a part of things! To me, it's something that's lighthearted and fun to do.
I was just chatting with my mom about weddings tonight and we both agreed that I need to have a very fun and upbeat reception, because I've never been one to be quiet and subdued!
(edited because I made many a typo the first time around...)