A lot of interesting points being made here! A couple of things to add to the debate
1) Why do people think that TechEd is only geared toward sysops types? A LOT of devs go to TechEd (particularly TechEd Europe). From the official MS blurb: "TechEd - Microsoft’s Premiere Event for IT Professionals & Enterprise Developers".
2) Companies are happy for their employees to go to TechEd as they enjoy and learn from the event - it's a win win, a break from the office, a social gathering with other techies and sessions where they can pick up valuable knowledge to take back to the office. I also imagine that TechEd generates a lot of money and publicity for Microsoft, both directly (tickets, sponsors, Expo space) and in terms of product/brand loyalty down the line. For this reason MS should be doing all they can to make attendees happy, so they go back to the office and say to their employers 'that was a great event' - whether that be because of great sessions, a fantastic party or a bunch of freebies. Then, next year, that company will send employees back to the next TechEd, and so the cycle repeats. If this means giving away some free gifts (i.e. a TechEd subscription, or a hardware offer) then they absolutely should do it - companies haven't paid $2200 + costs for their employees to go back to the office disappointed because MS scrimped and cut back. If this happens = no more TechEds.
3) There is no MS store at TechEd Europe - so I doubt there will be any heavily discounted items from there or wouldn't really be fair on the Euro attendees!
4) I'd love for them to prove me wrong but, judging from recent TechEds, I really can't see MS giving away hardware either
5) This is in no way a dig at MS/TechEd, really enjoyed past events and hopefully will this one!