Cats should be given a human-style burial when they die if that is what the pet owner wants to happen. The premise of the question is that it should not be allowed...presumably by a government entity. People grieve the loss of their pets in different ways. Let them bury their pets as they see fit.
It should be okay for cats to be given a human-style burial when they die. The owner of the cat should have to pay a human-style burial price, though. If the owner is willing to pay, then the funeral home should be willing to give the cat a human-style burial.
A pet owner should have the ability to choose how they say goodbye to their pet. If a human-style burial is what they feel is best, they should be allowed to choose that. Some may reject that ideas because they believe that cats are not as important as humans, but just because a cat has human-style burial doesn't mean that your family member's burial is less significant. With this, it is also important to think about what others have gone through. That pet may have gotten someone through rough times or represent something bigger to that person that one may know.
No, I do not think that cats should be given a human-style burial when they die. My belief is that the type of burial a cat gets should be dependent on what its owner feels comfortable with doing or wants to do. There shouldn't be a dictation on how one shows their pet's death and their grieving process.