Weddings are a tough question for the frugal-minded. You have to walk a line between it's one of the most important days of your life and it's only one day. No celebration is just as wrong (in a different way) as $25,000 that you don't have. I always wanted a wedding, and I would've felt that I'd missed something if I hadn't had one; however, we spent less than $1000 on the whole thing -- by that, I mean dress, rings, reception, everything.
I personally do not know anyone in real life who's spent this kind of money on a wedding.
I understand that you're upset that he's making an outrageous financial decision, but try not to be angry with him about it. Yes, he had a better example growing up, but he's still young and is just finding his way in the adult world. Around him he sees lots of people his age who are overspending in multiple ways, and he doesn't realize that most of them who appear to be "living large" are actually digging themselves into debt. It looks nice to have all that stuff, to do all those things -- he's tempted.
My suggestion:
1. You and your husband agree on what you are willing to contribute. Once you two have agreed, stick to this number. OR decide what services you will cover: For example, you might say that you'll pay for the rehearsal dinner and the photography, but nothing else. In this case, I think giving a firm number might be the better choice.
2. Talk to your child (with or without the fiancée present? I'm unsure.) and explain that you are concerned about his lofty expectations and spell out just how this one-day spending can affect the couple's financial future. Offer what you have agreed to pay. Be kind, but be clear and firm.
3. Never mention it again. Whether he chooses to "go big" or be more practical, you have made your point. No need to nag or say, "I told you so." Whatever the couple chooses, be emotionally supportive and offer practical help where you can, but stick to the financial constraints you agreed upon earlier.