To add to Shalom's answer:
Rav Avira says (in the name of R' Ami and R' Assi) that a husband should "honor his wife and children more than what he has" (Chullin 84b). Rashi (ad loc., s.v. "פחות") seems to interpret this as meaning one should spend beyond his means to honor his wife. (See R' Chaim Shmuelevitz's discussion of this, cited here).
The Rambam appears to say, however, that while a person should allocate more of his money for spending on his wife and children than would be typical for a person of his means, he should not do so to the extent that he spends beyond his means or overly exerts himself to earn the extra money (Hil. Dei'os 5:10; see also Hil. Ishus 15:19, that a husband should spend money on his wife to the degree that he is able).
The Talmud (Sanhedrin 76b) praises a husband who "loves his wife as himself, and honors her more than himself." Rashi (ad loc., s.v. "והמכבדה") says that honoring her includes providing her with adornments (e.g. nice clothing and jewelry) beyond what he gets for himself.
Note that, while these sources indicate a husband should go above and beyond in providing for his wife, they do not support the idea that a husband should allow his wife to "take advantage" of him or totally destroy their family's finances by demanding an endless supply of luxuries (per the extreme hypothetical case you raised in the OP).
In any case, as R' Chelbo taught, blessing rests on a man's home in the merit of his wife. As Rava advised the people of Mechoza, they would do well honor their wives if they wished to become wealthy (Bava M'tzi'a 59a).