I think parties for young kids have to be kept reasonable. Kids get overstimulated, the parents go broke, and (as your husband is suggesting) it becomes a way for parents to make up for their own deprivation when they were children.
Large parties become nightmares for families because they can't handle the prep and the clean-up. But these kids are 4 years old! There's a standard formula that you invite the # of kids based on the age - so a 4 year old would have 4 friends, a 6 year old would invite 6, etc. When you have the whole class, it turns into a "gift fest" where 15 or 20 families have to buy a gift as the "price of admission" to an expensive venue. Half the time, the birthday child doesn't even open the gifts in front of the friends, so kids don't learn the skills they need like saying thank you, and like getting pleasure from giving a gift to someone else. And of course there are rarely thank you notes because the task is so overwhelming.
What's wrong with a few kids in the back yard or at a park? I think the back yard is better because there's a bathroom right in the house. The kids have more fun just playing simply - you can have a small piñata or you can put out the sprinkler or have a little treasure hunt, eat cake, open a few gifts, and call it a day.
These big parties are more about the parents than the kids. And most of the parents around here are sick of things like Chuck E. Cheese and the Bouncy places because the arcades just encourage a bunch of ticket-purchasing to get prizes that break on the way home.
Remind your husband that your child is 4, and will not enjoy the big huge venue one bit.