Just read your update. Not cool of DH, but I probably would have given in as well. Hopefully you can get on the same page for future gifts.
When is DS' birthday? You mentioned that he is almost three, which makes me guess it is coming up soon. Can you compromise by getting him a couple of small educational things for Christmas like books or blocks or a few accessories for the kitchen and giving him the kitchen for his birthday? If you do, make sure to tell DH about it now so he doesn't pick something else out.
P.S. Don't feel badly about being frugal - it is just being smart with your money!