sleepytinkerbell, the grass is always greener on the other side. Of COURSE the s'kids think it would be better/easier/more fun living with you, but when it comes down to it, things would actually be very different. My feeling is that this situation could be too stressful for you (with your own two young children plus the stepkids) and you may end up completely regretting it.
I have been in a very similar situation in the past and it didn't work out. My stepson came to live with us as a teenager and he, too, had come from a very different background - basically he'd had very few rules and did what he liked a lot of the time. He was always great when he came to stay with us on the weekends, but I saw him with his mother once and his personality seemed to completely change around her. He was disrespectful to her and spoke to her like dirt, whereas he was always very nice & polite with us. This rang alarm bells for me, because I figured he could also be like this toward us if he lived under our roof. When he came to live here, things deteriorated quite quickly as he wanted to do what HE wanted to do and didn't like abiding by our rules. I had my own young child to care for and dh was extremely busy at work, so I ended up with most of the tension & responsibility.
In the end he moved out after about 12 months (he left school and got a job) but it really affected my relationship with dh for the worse, and unfortunately our relationship with SS is not as good as it once was. In fact I think it's going to take a while to rebuild the relationship we had before he moved in. It wasn't solely his fault, sometimes he tried, but other times he made life hard for us - but the person I really blamed was dh, because he never gave me a choice about whether or not SS lived with us. I felt that it was forced upon me which I resented, not to mention that dh was absent so much of the time.
I would think so carefully about this and at least have a trial period to see how it goes. My SIL & BIL's marriage is currently on its last legs due to the conflict in their house regarding the stepchildren. It's one of those situations that's extremely difficult but if you can make it work, then that's wonderful and very admirable on your part. I just think your dh needs to know that it won't all be 'happy families' once his kids move in, as it's bound to get a little more complicated than that. Best of luck.