Well, my opinion is that given that he's inviting you to the event, particularly to be in it, I'd expect him to offer to pay your way, including your date/wife. I feel that having such an extravant and costly event (due primarily to the location), it would be the reasonable thing to do for the wedding party. Asking someone to pony up >$1k to be in a wedding is too much.
The fact that he didn't offer, or at least didn't make it clear who would be paying, I don't think it's unreasonable to decline, citing your reasoning.
I'm by no means Miss Manners, but I guess the difficult thing about manners is behaving well when others don't & put you in an akward position.