Would you say the same if public sector workers were getting a paid Christmas party?
I'd have no objection to it. I can't stand the people who don't want to see anyone enjoy themselves. If we all stopped spending there would be no economy left (not a justification for massive unsustainable spending just a defence of some minor frivolous spending!)
Also, from my experience of working for a large organisation, meeting someone just once in a social setting improves the working relationship dramatically. Half the time when dealing with someone you don't really know you are wary as to whether they are time wasters or not. At least if you've had some social interaction you are less worried of causing offence if they turn into a pain!