I found this fun and informative article on http://www.elegala.com/ today and thought I would share since this seems to be a very common question.
THE CASH BAR ISSUE
Yes, weddings are expensive. Yes, couples should be on the lookout for budget saving tips. Yes, weddings are expensive - we know. But never - under any circumstances - should you ever consider hosting a cash bar at your reception. Think about it - you would never ask anyone to pay for a cocktail in your own home. People at your reception are still your guests, even if the event is not held in your house. That said, if a full bar is not within your budget, consider these alternatives:
1.) Host a soft bar, in which guests can order champagne, beer and wine.
2.) Find a reception site that allows you to bring in your own alcohol; you will save serious cash, and anything unopened can be returned for a full refund.
3.) Cut down the size of your guest list - the only significant way to reduce costs in the first place.