I hate this practice.
Its origins are firmly rooted in superstitions about sneezes as omens of death or portals for demonic possesion. It persists today merely through strength of habit. I can't be the only one here who sees a "blessing" given solely for reasons of ettiquette and superstition as a bad thing, can I?
That's why I don't want to say "God bless you" after someone sneezes... I don't want to hear "God bless you" after I sneeze because I have no desire to be "blessed" by heretics, Jєωs, pagans, apostates or atheists... And, let's face it, when you sneeze outside your own home, you're overwhelmingly likely to be "blessed" by one of these.
And, speaking as a lifelong serial sneezer, I would hasten to add that there is nothing more annoying than having to force out numerous "thank yous" between each sneeze during a particularly violent episode.
But that last selfish note aside, I do think this is a pretty serious abuse of the invocation of God's Holy Name for blessings. I ask anyone who still practices this nearly ubiquitous abuse to consider this the next time a coworker's upper respiratiory system's overreaction to pollen or cat dander causes a reflexive urge to impart a blessing meant to prevent that person's soul from escaping through his nose.