I agree that the purpose of a group gift is to allow people to give what they can afford or feel is appropriate. Many families have several children and if they have to ante up $25 per child (right around the same time they are finding summer day care or programs), it can be prohibitive. Give what you want. The people who are discussing the amount they gave ($25) are defeating the purpose!
As a former teacher, I can tell you that I absolutely did not need a million trinkets from so many children. It was very sweet but, really, after 5 years, can you imagine how much I accumulated? If you go to yard sales, you will see all kinds of "World's Best Teacher" doo-dads for sale - no one can keep all of these. Cookies are a sweet idea too, but honestly, what do you think we teachers do with 20 batches of cookies and their matching jars or tins? Parents and kids think it's cute, but they don't think about how guilty the teacher will feel because she can't eat them all or can't display her 40th trinket in her home.
The money given to teachers is, more often than not, used by the teacher to purchase materials for the classroom, to make up for budget shortfalls. Anyone who thinks teachers are overpaid is sorely mistaken, with the possible exception of those employed by a few elite private schools. Even if they spend the money on themselves, so what? My friend is a kindergarten teacher, and she got a gift certificate from the class to a nice boutique. She bought a lovely pocketbook - and every time someone compliments her on it, she says, "I got this from the class of 2006" - so believe me, she remembers the class who gave it to her. I would try to give the teacher a gift card for either a mid-level store or boutique, a multi-service spa, or something like an American Express gift card. I wouldn't do it for a cheaper store, that's all, where the teacher won't have many options except to buy household items.
When I collect money, I pass a large envelope around with every family's name on it. I don't look at what they put in. They cross their name off when they are done. If they put in $25, fine. If they put in $3, fine. When it's done, the teacher or other recipient (choral conductor, whatever), gets the gift.
I think the coordinating parents who offer to put your words of gratitude on the card have things in the right priority.
Stick with your contribution if you are comfortable with it and don't second-guess it. You don't want to encourage more of the parents chatting about what they gave to an "anonymous" gift collection.