Me neither. But I think it's at least one part of the cultural ritual of wedding. I mean, a rule like "the diamond should cost at least such and such" is not even conceivable outside this type of framework (consider that artificial diamonds are also a perfect substitute- and as perfectly useless as the "real" ones).
I don't have good references here, it's just observation. But think about it: all the process of the proposal, the engagement, the long planning, the event itself, the dozens of relatives and friends invited, the food and the party... it's heavily ritualized and designed as a public and expensive event. Of course, you can deviate from the script as much as you want. If anything (also pure observation, I might be wrong) it seems to become less extreme in cultures that value more careful planning against spontaneity and of, course, tradition: for example weddings in India are an incredibly expensive affair that can last for several days and have thousands of guests.[1]
Somehow the practice reminds me a bit of that of the potlatch [2], a ritualized exchange and destruction of goods that was meant as a display of wealth in some tribal societies (possibly also ancient Greece).
[1] https://medium.com/@rubychandu/the-nonsense-that-is-indian-w...
[2] https://en.wikipedia.org/wiki/Potlatch