OP,
Although I agree that is was important to spell out all the costs before the invitation was issued, it does sound like the other family expected to kick in some costs if they asked you about how much money they would need.
Each case is different and each family is different. Only you know the friend's family. Their ability to afford spending so much money on their child's vacation as well as their attitude about it makes a difference.
When I was young, my Aunt (Mom's youngest sister) who was only 11 years older than me, would "invite" me and my male cousin to the movies. She took us to Star Wars, Raiders, and me to Gone With the Wind on the big screen. She also took me to the ballet. I'm pretty sure that my Mom paid her back for the tickets since she was a poor college student at the time.
When I was in HS, she "invited" me on trips with her and one of her girl friends. We went to
DisneyLand, drove down the CA coast, visited the Musuems and Mansions, and the San Diego Zoo, among other things. My parents paid for all my expenses (airfare and we all split the costs of the hotel, car rentals, and meals) and I brought along my own spending money.
When my Aunt got married, she and her new husband "invited" me and 2 of my cousins with them to WDW on their HONEYMOON!!!
We stayed at the Poly, I shared a bed with my girl cousin and her brother slept on the day bed.
My parents paid for my airfare and admission tickets and I brought my own spending money but they picked up the tab for the hotel, car, and all meals out. However, I suspect that they also picked up the whole tab for my cousins because no way their parents could afford it.
When I was in college in Miami, I had my own AP and they would always invite me up to WDW when they were there. I would drive up and crash in their room. When we went out to eat, they would treat me.
When they went on a cruise out of Miami, they invited me on a super cheap 3rd or 4th pax rate. They had 2 girls by that time and my Aunt was expecting their 3rd. They paid for everything including the cruise fare (no airfare 'cause I was in Miami) and excursions. In return, I helped out some (minimum) with their little ones.
Now that I'm married with children of my own, I meet up with my Aunt ALL THE TIME at WDW. We are both
DVC members. She has 8 kids and the youngest one (girl) is 4 months younger than my DD7. She usually brings her younger kids and one older one (to help out) when she joins up with me so that our kids can play together.
When we go out to meals together now, everything is Dutch.
My Aunt enabled me to do things and go places that I never would have been able to do at a younger age, not because my parents couldn't afford it, but because they didn't have the time to take me. So, in those cases, even though she "invited" me, most of my expenses were paid for.
She still loves to invite my much younger cousins on different trips. When a family member can afford it, their parents pay part of the way. If they can't, she and her DH treats them. They usually pay for all meals etc., for both. It does irk her when one of her more "affluent" sisters let her son keep inviting himself to their home and family trips and "moouches" off them and she turns a blind eye.
Sorry to ramble on. But maybe this is different because we are relatives and know each other's financial situation better.