I can see it from both sides (professional fence-walker here

).
Jayde, I can see you point of view. I think one of the key points you mentioned, however, is 25 kids per room.
25 kids????? That's waaaaaaaay too many! And it's one of the biggest problems I have with our publc education system in the US. Too many kids and too few teachers per room. If you had just half that many... the kids get more attention, the teachers are less stressed and as a bonus, you have far fewer birthday cupcakes to contend with!
With 25 kids, I sympathize with you on the cupcakes and parties and sweet-laden treats.
OTOH, I understand how a kid wants to share the celebration of his/her special day, and in many cultures, like it or not, celebration = food. Maybe it's a holdover from when food was more difficult to come by, but it's the tradition we've inherited.
I wonder if there couldn't be a compromise? If a kid wants to bring cupcakes for their birthday, have them bring the mini-cupcakes? One per student. Have the teachers use something other than candy for incentives. Pencils, erasers, bookmarks, trading cards? Hard to get away from candy at the Halloween party but do you need it for the Valentine's party? Why not daisys or tulips?
It's tough all around, but I'm not sure cutting off birthday cupcakes is the right solution. It's an easy solution, but easy doesn't always equal right. Right?