Sounds like the therapist needs a therapist. What a freak! No this isn't ethical at all. She should not be divulging anything about her personal life with you. And no, she shouldn't be using her job as a way to network for her loser kids who can't find their own way in the world, and to garner extra money on the side for her own personal problems and needs.
Take a clue from the other therapist, she's messed up, and probably needs to be reported to an ethics board. She's abusing her position and privilege and it isn't professional or ethical.
Phooey on the anti-depressants being the only solution. After losing her job and being really upset about it, one of my dearest friends started seeing a therapist a few years back, got put on antidepressants, gained 50 pounds from them and was suicidal. Her fiance told her he'd drop kick her if she didn't stop going to the quack she called her therapist. The therapist just about destroyed her life after he convinced her she was mentally ill and more. She was none of these things, and anyone who knew her well could tell her so. But she hit a rough patch and unfortunately got mixed up with this nut. THankfully, she loved her fiance more than quack therapy, got rid of him, and went on a diet, stopped the antidepressants, got in shape and is better than ever. She shudders when she thinks about the goofy therapist. Needless to say, she has me convinced that therapy is for the birds.
I say in your case, at the very least it is time to find someone new, or just chuck therapy altogether. If you need someone to help you sort things out in life, you might do just as well talking with a close friend or confidante. You'll find the end results are the same... with the exception that you'll still have money in your savings account...and perhaps a little more sanity to boot. Try natural ways to fight your depression. You might be better for it.