I think I am a dissenter here...
I do not think that there is any big obligation to always remember these birthdays... Also, often it is the woman's (grandma's, aunt's) kind of thing to remember and recognize these birthdays. It sounds by the way you said "his wife" that this woman is not the children's grandma.
I see no correlation at all between a friend organizing a big party... and 'expecting' others to solely and individually, on their own, to feel obligated to always remember and recognize these things. It is not like your Dad was planning a big party... He just asked to borrow something...
I just wonder if I am seeing a lot of unnecessary drama here.
If the parent's (such as the OP) want to make sure that as many family members and friends honor their child's birthday, it is up to the parents to organize some kind of get-together/celebration.
I also would not be wanting to set my kids up with any more of a sense of 'entitlement' than many americans already have....
I am reminded of the recent thread where a DISer received an email from a relative (a neice???) wondering if she had remembered to send a check....
I would cut him some slack.
Either find a way to remind him of upcoming birthdays in conversation... or just let it go.
To not say a word until after the fact, and then 'should I make them pay....."
(unless, of coarse, it is the situation where grandparents openly and smugly treat certain grandchildren with excess, while snubbing others... And, I am not thinking that this is the case.