This episode is a wonderful reference to all of the "Back in my day" type of comparisons, and todays snowflakes or as referred to in the show as squibs. Is that what you Aussies call them?
The general concept is that the "Everybody gets a prize" culture is supposed to be perfect. It doesn't work well with the randomization of the game. Lucky's Dad ends up in charge of the next birthday's game of pass the parcel, with his old rules. It starts off normally, with everyone excited, but it turns south quickly as the kids aren't getting prizes when it's their turn to remove a layer of giftwrap. The winner ends up getting a better prize. The kids eventually catch on and enjoy Lucky's Dad's rules, and prefer them over the new-age rules.
I really like this episode as it teaches everyone that life isn't fair, you can still have a fun experience if you don't win a prize. This episode also resonates quite well with me, but that's a story for another day.