Role of food as an allowed monastic luxury Whenever the Buddha and his retinue were invited to the palace of a great King or a big merchant, the suttas don't forget to mention the feast was delicious and rich.


  Then King Prasenajit, for the sake of his father, the late king,
  arranged on the day of mourning a vegetarian feast and invited the
  Buddha to the side rooms of the palace. He welcomed the Tathagata in
  person with a vast array of superb delicacies of unsurpassed wonderful
  flavors and himself invited the great Bodhisattvas. SS 1:121


Of course the Buddha was never attached to such things, as we are told he ate grass meant to feed horses offered by a stablehand with the same beatific smile as he ate palace delicacies.

Yet, how is it that when high beds, and perfumes and all manner of luxuries are disallowed, throwing a feast or banquet is actually encouraged as a means of merit making for the lay follower? Especially when one considers how this sets apart the poor lay follower who can only afford to feed the occasional monk on his alms rounds.

A casual analysis of monastic accounts over the ages reveals to me a general tendency for monks to even look forward to such feasts. I can imagine there are good reasons for this loophole - after all, a feast probably was a good source of much needed calories while living in the forest.

Still it is one of those odd things - who in their right mind could think they could honor the Buddha with a feast? If anything, he probably favored the simple flavors of fruits of the forest over puddings and rich food.
Actually, high beds and seats are not disallowed; making them is. It's not really so cut and dried, and the Buddha seems to have allowed for the fact that (some) luxury is not the problem; attachment is.


  throwing a feast or banquet is actually encouraged as a means of merit making for the lay follower? 


Not in the texts, it isn't. It is actually stated rather simply as "refined food both hard and soft". If anything, the point is to make mention of the rich people putting care and sincerity into their gift, which is very important for cultivating wholesome mind states.


  Especially when one considers how this sets apart the poor lay follower who can only afford to feed the occasional monk on his alms rounds.


The texts often make mention of the greatness of poor people giving coarse fare according to or beyond their means. The important point is one's quality of mind.


  who in their right mind could think they could honor the Buddha with a feast? If anything, he probably favored the simple flavors of fruits of the forest over puddings and rich food.


Not according to the Buddha; he was raised as a prince and his palate was quite refined; when he first went on alms as a bodhisatta, he said that it felt like his stomach was going to come out of his throat in protest of the coarse fare. I think it is unfair, though, to suggest that the Buddha favoured any type of fare. He did praise a monk who  separated his food into wholesome and unwholesome once, though, so there is that.