Is it ethical for PhD advisor to collect ideas or even project description text from students/postdocs for his/her own funding proposal? Not sure how common this situation is, but this seems strange. Could anyone help?
In many places, your stipend (including overhead) as well as the costs of running the lab, buying computers, publishing papers, and traveling to conferences all comes out of your PI's budget. That budget does not magically appear, but is funded through grants. Those grants have some leeway in what work they might support, but not infinite latitude.
So: going forward do you want to be supported? If so, would you not prefer to be supported to do something that you want to do, rather than whatever your advisor can get funding for without any help from you?
So, yes, it is entirely ethical for your professor/PI/advisor to ask you for ideas and even text to contribute to the grant application. Should you have no desire to help procure funding for the group to work on problems of interest to you, you really need to contemplate just how you are currently funded.
Part of your training is learning how to write competitive funding applications. Contributing to them is part of your training and doing so early in your career generally means you're working for someone who's good at training. Being asked to write a funding proposal in it's entirely for your supervisor to sign would be inappropriate.