I think it's acceptable, but I do understand where some people will say it feels less personal. The husband and I give money to his siblings but we're not that close to them (and we don't really know what they like/enjoy).
I try to avoid monetary gifts as much as possible. Just because, if you give them money, it's not really a surprise what they will buy. They will just buy the normal things they normally would (unless the gift card itself is outside the box)... much better to have someone choose for you since it wouldn't have been something you will probably buy in a few paychecks on your own. A lot more memorable.
I think a good compromise is if you're giving for a couple (or someone who is dating), you can gift a giftcard set for a dinner and a movie, etc. It's not as good as giving them something physical, but maybe it will lead to something physical...