The "investment" is giving the hosting club the ability to host future events, and maybe some funds left over for course improvements. If all a player is worried about is getting a % back, maybe they should go find a part time job instead. And I'm saying this from the viewpoint of a low-level intermediate player who rarely ends up in the top 3. It's good value anyway in my book just to get a day's worth of entertainment for $25. Coming away with something in hand at the end of the day is just gravy. If it's a good bunch of players on a good course, I don't care if I pay $25 with no player's pack, and leave with no prize or gift.
But to answer the OP's question: yes. That arrangememt seems fair, and actually a little above the norm. Our club has recently moved away from trophies to medallions, and offer no lunch or player's pack. But we usually pay out to the top third of the field. I think we usually do more like $15-20 buy in for all am divisions. Only Open gets cash, everyone else is paid in plastic. Non-sanctioned, but we're investigating doing sanctioned events.