Wow, I didn't read every post, but I can tell that I may get flamed for what I am about to say.
It sounds like you are loving caring parents and your kids are very fortunate. BUT...
I did not see the age of your children, but I really don't think it is a phase. Being disappointed is one thing, but asking your husband to give up something of his...well, that is a big warning sign in my humble opinion. ( I could tell you some real life storys..)
WARNING: MORE PERSONAL OPINION TO FOLLOW
It is never too early to teach children about money. Instead of a free allowance, allowance can be their pay for the chores they do. You can assign chores for ANY age child. Mom and Dad can be bankers, and should not pay for everything all the time. Some toys and other items should be paid for by the kids. My dad did this for me at age 6, and although I did not think it was all that great then, lol, now I know what a kind thing he did for me. As your kids get older, they can do more chores for more pay.
This teaches them lessons in life that can not be taught just by telling them. (You will find that those " I need that" items decrease when they have to pay for part or all of the non necessities. )
Please know that I did not want this to sound mean, but so many kids now days really do not understand how hard money is to earn, compared to how easy it is to spend it, and after leaving home are not full prepared for how to say no to
themselves when it comes to what they want, vs what they really need to do. My very best wishes to you, and I really hope that I did not sound unkind.
