Bocephus that's a great picture!
Not just a fun one, but one demonstrating impressive self-control training!
I haven't had a birthday party for my dog (though we do give him gifts) simply because I feel a little overwhelmed about hosting a doggie party! but my dog and I have attended birthday parties for other dogs.
Most recently we had a birthday party in the dog park, for one of the doggie daycare staff whose dog is friends with my dog. It was so fun! there was cake (for dogs and people), and games like cake-eating contest for the doggies! Of course we humans had fun socializing with one another too! And being in a dog park, the dogs all got to play off leash.
We also gave presents to the owner for her birthday dog, (of course, addressed to her dog, from our dogs!) and she in turn gave all the guests little gifts for our dogs too like tennis balls, frisbees and bags of treats (again, addressed from her dog to our dogs!)
It was such a blast, and I don't see any reason to NOT do such a thing. The dogs certainly had a great time!
I wouldn't host a doggie birthday party myself though, as I think I couldn't handle all the details! this lady who had the party for her dog, was a daycare employee so she's used to dealing with packs of dogs!