Too often one encounters the phrase "Bless you!" after having sneezed. It is quite odd someone would need to say something like "bless you" after having an irritation to the mucous membranes of the nose or throat resulting in many tiny particles of those mucous membranes flying out of your nose...up to 100 miles per hour. 
OK, that last bit is pretty amazing but I do not think it requires the overused and unnecessary "bless you."
Perhaps we should look at a brief history of the sneeze. The ancients (Greece) believed the sneeze was an omen (usually good) sent by the gods(source). The exodic Hebrews believed that a sneeze meant you were closest to death "since the act expelled a portion of the breath of life which the Almighty had originally breathed into Adam's nostrils." The Romans responded to a sneeze with "absit omen," to help avoid misfortune falling on the person doing the sneezing. In the sixth century, Pope Gregory the Great started the "Bless you" phrase after someone sneezed in order to have god help the poor unfortunate person who had met the Bubonic Plague. Sneezing was a warning sign of the horror to come(source).
So it appears that bless you, at least partially, comes from the fear of dieing from the Bubonic Plague (which don't get me wrong was very nasty and almost impossible to stop at the time) and hoping the sky-daddy will be in your favor as to change his divine plan for you and allow you to live. Perhaps "cover your mouth and nose" would have done better...I am not a doctor though.
I used to be of the opinion that it was best to reply to a sneeze with "gesundheit" but now I have come to the conclusion it really is not all that necessary to say anything at all. This response, on Ask Metafilter, by thatbrunette nicely influences and sums up my thoughts:
santé is French for health; colloquially "to your health". I say that when people sneeze, if I say anything at all. For some reason, to have any sort of remark for a sneeze, but ignoring every other bodily noise a person makes struck me as funny and making little sense.So that is it. If you or someone else sneezes then leave it at that...go on doing whatever it is you were doing. If you happen to be so fortunate as to have a handkerchief or a tissue nearby, then you could be courteous and give that to them. If they are one of those people who never(and you know they never do) covers their mouth and/or nose-tell them to do so for everyone's health.
