J.B.
Well the groom's family hosting the rehearsal dinner is pretty traditional. He certainly is not out of line to ask (I never would, but that's just me) but you and your husband are not out of line to respond with "while we would love to be in a position to host your rehearsal dinner, our financial situation right now means that we can't" and then perhaps offer to give him the same amount of money that you gave your daughter for him to use towards expenses as he sees fit or you can offer to pay the bar tab if you think it will be something you can afford.
I would let go if your outrage that he asked - he probably knows little to nothing about your financial situation as it's easy to assume one's parents are doing just fine financially. Just have a frank discussion with your husband that although you understand that he would like to be able to do this, you simply can't be that generous right now and will have to decline the request.
You also can't really hold it against the son that you and his dad have set inappropriate financial boundaries for him. It's not his fault that you don't charge him rent. If you want him to pay rent, then charge it. If the no rent situation is your husband's decision, then be angry with him and not his son.
And to answer the question about when does someone outgrow daddy taking care of him? When daddy draws the line and stops supporting a grown child. Encourage your husband to stop supporting him if you don't agree with the financial arrangements.