Good subject. I like this topic. I grew up with this fun, and now my child has the fun with it. JW do go overboard when it comes to this stuff. Being around witnesses, and experiencing them lying about various things, even if little "white" lies, really blows credibility with me. Even worse, when they are caught lying to each other.
Scripturally, having fun with these holidays has never taken anyone's salvation away, unless maybe you're anti-God, a devil worshipper, satanist who would like to kill people on halloween or something.
Christmas, Easter, Birthdays, Thanksgiving, and the generally innocent fun of Halloween are just fun themed periods during the year that we have fun with. Some could care less about these holidays, that's there choice.
JW feel they have to always work towards "Jehovah's" favor, and are told they are in less favor if they partake, thus the possibility to lose salvation. They will never understand the concept of God's Grace, as it truly is. We are saved not by works but by faith, and those who try and tie salvation to the "faith without works is dead" scriptures, is mislead. It says nowhere in there that you lose your salvation in those scriptures.