I mean, he's over reacting for sure.
But I see both sides here - what needs to happen is a loving conversion, not an argument. He sees this as unfair and probably feels rejected. If he's not usually a control freak - if he's a normal loving husband and he's just got a bee in his bonnet about this then for me the conversation needs to be handled sensitively.
No argument you just need to sit down with him and ask questions about how he feels. Why does this upset you so much? Etc. And let him really tell you and don't argue that his feelings are wrong. Meet his statements of well I think they should spend the money on xyz with responses like 'that's true' or 'that would be nice' and nod and agree. Disarm him. Show him you're willing and agreeable with him so that you have given ground enough for him to be sufficiently warmed up and feeling understood enough to listen to you.
So tell him you completely get it but explain the conflict you're feeling because you also understand your parents view. Then explain it from your parents point of view. Help him see it from their perspective and look to your own children, e.g when we're older wouldn't you want to be able to spend with just our children? Also explain the tradition. Don't tell him your sil doesn't care so he shouldn't either sort of thing. He does, so that's where you are at.
You can make the point that your parents have worked hard for their money and you want them to feel free to make choices over how they should spend it. Again help him understand how he might feel if in the future a partner of your child was making demands about how you should spend your money, e.g if him and his son love the football/concerts etc how upset he might be if a son or daughter in law started to say you shouldn't have that experience and instead you should spend the money on a spa weekend.
So you want to be saying things like:
My parents love the theatre and they love this little tradition of having us together. They love you too and they love their Grandkids but just once a year they like to have 'their' babies together so we can share old memories of when we were young. I want to be able to do that with our children when they're older, don't you? I love my Mum and Dad and they're getting older now and I think they should have more of the things they want to do just for them. I know I would feel like that at their age after a lifetime of making sacrifices, do you think you would feel like that too? I completely appreciate your point. And it would be lovely for us all to get together and go to lunch or a theme park but that's not what my parents would really love to do with this money. For them having the 4 of us together is one of the highlights of their year. Wouldn't you be sad for them to not have something they so look forward to? I do really want to go. My parents are getting older and I really treasure these moments. It's not about not wanting you there. It's about one night of the year taking some time to do something my parents really love to do and reliving old times. I really hope you can be OK with that and - how about, since you're looking after the kids - I bring you a breakfast in bed/watch a football match/take you for a pint (whatever it is) the next day.
In a relationship telling someone to F'ffff off and deal with something their upset about is just about the worst advice anyone can give. It's just a horrible way to behave in a relationship with someone you love. But loving someone doesn't mean doing as they say either.
Relationships are at times a constant negotiation. Sometimes we see things from our point of view only. In this case it seems like he just needs help understanding from other people's perspective and help with understanding his own feelings of rejection without being argued with or patronised or told to ffff off or issued an ultimatum.
Like I say a loving conversation needs to take place while you hold firm to yourself that you are going.
If he completely disregards a very well thought out and loving conversation - then absolutely, put your foot down and tell him he is being very unreasonable and you can't respect the attitude he is displaying. You are very disappointed in him. You think he is being incredibly selfish to make demands on what your parents should be doing with spending their money on things he wants to do. You also find it controlling and a particularly unattractive quality in him dictating whether you go or not. You're not talking about this anymore but he's free to come find you when he's had a chance to reflect - and you will be going.
Then swan off to have a bath or something with a disparaging and disappointed look!
But hopefully it won't get to that after some handholding on working through his feelings and seeing it from an alternative perspective!