Actually both are right in their own ways. It really depend on
individual's character.
Your dad is more rational and his view of wasting roughly close to
8K a year on a 7-series or S350 don't seem rational to him. I
believe that to him, money can be better spent elsewhere now or in
the future (savings).
Your uncle is obviously a very different character than your dad.
He probably has a "We may never see tmr attitude". Although he
spent the huge amount of money on his car, if the car is something
that he enjoy it then why not?
It all boils to if your uncle or your dad feels the money is well
spent or not. Even if your dad go and buy a merc or bmw tmr, if he
don't enjoy it, then what's the point? Might as well drive camry.
On the other hand, if you uncle is restraint from buying his jag
XK, I think he will feel miserable, which then why not spent the
money for something he enjoy.
Just live life the way you want it as long as you can afford it, it
is not that you need to drive the biggest, most expensive car
possible, but the satisfaction you get from owning the car you
want. 
