WOW, that's crazy. Your b/f should be SO mad at her for expecting HIS friends to pay for her daughters b-day. And YES, it is your business. Not to do something about it, but to find out his perspective on the situation because if that is his standard & he believes in her values, you may have an issue in the future. I mean, don't get MAD at him for defending his mom, just tell him you want to know if he thinks what she did was right & if that is his perspective on the way things should be handled. WOW-I know exactly how you feel. My mom-in-law spends all her husbands money, his paycheck & then makes him give her his extra money when the dogs run out of dogfood. I just don't get it. And I know it's not my place but right is right & wrong is wrong--and I think both our men's moms are dead wrong!
I mean if she needed money, she should have talked to family members first, then talked to your b/f to see if his friends might want to pitch in & help decorate or something.
But really, you have to bite your tongue in these situations b/c no matter how crazy they are, it's not our place to tell them that & you don't want to hurt your b/f. However, I would strongly suggest discussing this with him to find out where he stands on the issue. Don't badmouth his mom (that may be why he fired off before-he felt offended) just calmly talk to him about it & make sure that his values match up to yours!!
Good Luck & BEWARE THE CRAZIES!!