I think you're focusing on a generational difference and assuming that if kids were raised the way they were in your day, everything would be fine. The thing is that extracurriculars are a relatively - relatively - small piece of the pie for most families, unless you get deep into travel sports, competitive cheer or something like that. Also, fwiw, extracurriculars are not about 'coddling' or 'pampering' kids. They take a good bit of work, after kids have already been in school all day. It's more about doing something that you hope will be developmentally beneficial for children and teach them stamina, discipline, teamwork, etc. (And before you tell me they should be playing stickball in the streets for that, lol, there's no one out in the streets to play stickball with and it's entirely possible someone would call the authorities if they saw a kid wandering the streets alone. It's just not an option in 2025.)
Things that have gone up exponentially in price - home prices / rent, home repair prices, car prices, car repair prices, college tuition / room and board, health insurance, health care and prescription prices (it used to be that you paid your copay and that was it, now it's commonplace to get a random bill for anywhere from $50 - $900 after fairly routine medical care). I'm not sure that daycare was as common in previous generations so I can't necessarily say costs have gone up, but current cost for daycare near me is $22,000 a year for an infant, around $19,500 for a preschooler. Also, if you want to be a working professional in many areas, for a family a requirement of that is often a two car household, two laptops, two smartphones, and internet. Recently, of course, groceries have gone up quite a bit in price as well.
Of course average household incomes have also gone up quite a bit over the past few decades. I'm just saying, I don't think you can make blanket statements. Sure, some people might be missing out on Disney because they're frivolous with money - I don't claim to know the finances of everyone in the US. But for many, I think the basics of life have grown exponentially more expensive since the days when kids played until the streetlights came on.