Is gift authorship for PhD advisors rampant in academia?
This situation is not uncommon but not rampant, and depends very strongly on the culture of the institution, the department and the field of research, or even the individual thesis director.

There is some weak argument to be made that thesis directors provide resources (intellectual or otherwise) so they should be more or less automatically co-authors of work done by students.  If they are not then the resources going to the lab/research group through grants or other competitions might be jeopardized.   In other words, the resources you can access now are in part due to the past record of the supervisor so she/he needs to keep this up else these resources will not benefit the next generation of students.

There is also the argument that big names function as imprimatur in the sense that they will provide visibility to the work beyond what the junior authors could hope to provide.

Overall, I have always found both arguments not completely satisfactory.  While certainly a thesis director should help a student as much as possible, there are clearly situations where it is not necessary for a thesis director to co-sign a paper.  Likewise, it is entirely possible to highlight in a positive manner - in a grant application or otherwise - the fact that a student publish without his/her thesis director.