areivim, you have confused 2 separate issues.
Issue #1- should there be Chinese Auctions?
Issue #2: Assuming the answer is yes, should they be over-the-top, “Get your gashmius here!”, anti-Orthodox values in order to make money? Their message to the irreligious is that money is nothing, gashmius is nothing, only ruchnius can bring you true happiness. Then they turn around to the frum community (suffering from the effects of too much gashmius) and offer the exact opposite message! Win gashmius prizes and achieve true happiness! Most other Chinese auctions are not over-the-top, and do reflect the awareness that if they need to do this to raise money, the emphasis is on the organization, not the prizes. An animation showing a dancing dollar bill and highlighted prizes is THE EXACT OPPOSITE of the message we need to send our children. Rabbi Shaya Cohen of Priority-1 says that many children go off because of hedonism. Must we stress something that causes kids to go off the derech in order to bring other kids back? If they offered a subscription to Netflix and 100 dvd’s of your choice as a prize, and justified it with “It’s a big money-maker, and helps fund our kiruv programs”, would you have the same viewpoint?