This is very much a question of culture. Eastern cultures put a lot of meaning in "face". Now, by paying for the meal, you gain "face", which by many is considered more important than money. - And in a way it is, because for a, say, Japanese, its worse to loose your face than you money; you can earn more money, but it can be hard to regain a serious loss of face.
Western culture is less occupied with face, but it means something to us too. Just look at these two statements:
1) "I think he lost most of his money on his last business investment"
2) "I think he is an uncultured clod"
Which would you be least happy to have people say about you (provided you are a westener)?
Hans