I read this twice and still can't figure out what makes this guy awesome. :?

Stop spending your money on his kid.

Please stop falling for the I can't afford it line of BS.

What would he do if you were not in the picture?

So I'm assuming with the 50/50 there is no CS? $90 tennis shoes is not out of line if her parents want to spend that much and can afford it. Problem is, you're the one getting the bill. With no CS both houses should be paying for what each household needs in the individual homes. Clothes at both homes, paid for by each parent. Maybe take turns with haircuts.

These parents have to figure out how they are going to equally share the cost of raising their child. It would not be unrealistic to assume if Dad's income is twice the amount of BM's, Dad pays for a bit more. Things like who is providing health insurance and paying any co-pays and left over not paid by insurance should all be taken into consideration.

What should not be taken into consideration and/or a part of any of it is your income. Separate your finances now. Work your household budget so that household bills are evenly or by % divided between BF and you. In this household expense thing, think of it no different than you would a causal room mate. You wouldn't pay for a room mate's kid to have tennis shoes or haircuts and your individual income should not be going towards your live-in BF's either. Not even when you're married. Two people are responsible for this child. BM and BF.

There is nothing 'wonderful' about a man who let's (even expects) his GF/DW to support his child. Nothing 'wonderful' about two parents deciding GF's or DW's income will pay for things the two of them desire their child to have. Think about it. The only difference right now between the government handing these parents taxpayer hand-outs or you doing it in place of the government is zero. These parents have to live within their means. Your pocketbook is not meant to supplement their desires to have and ability to live outside their means. Two able bodied parents who work and earn their potential should not be collecting 'free' handouts at cost of a third person aka you.

This is one of those situations where gender seems to make a difference. If OP were a man with a good income it wouldn't seem unusual for him to play the part of provider and help his partner with some of the expenses of his stepchild, without his partner being accused of being a leech. When it's a woman everyone leaps to assume she's being deliberately used and exploited by her partner and is a complete fool. I think there can be more subtlety to the situation than that.

Let's assume for a moment that her SO loves her and is generally a kind and considerate partner, with the usual Achilles heel of a man with children - his sense of fairness and what is reasonable with regard to his daughter and ex is distorted by paranoia and guilt. Now this man does not have bad intentions, but it's going to be very difficult to change his thinking and behaviour, because that guilt and paranoia is a strong force. He probably feels he cannot make BM do anything, and like a lot of men tries not to poke the hornets nest. He just wants a quiet life. It's going to be very hard for the OP to make her SO make BM do anything - that's 2 layers of resistence. And that's the crux of the issue.

The only practical solution and the one which will cause the least friction in their relationship in the long run (even if it causes a bit of friction in the short term) is to separate their disposable income, so that bills and mutual expenses are dealt with from a combined pot, but both parties have separate accounts for their remaining income. That's a fair and reasonable solution, and although SO may initially be taken aback and offended by the change, if the OP is calm and pleasant about it and presents it as the best solution for reducing tension over money for them both, he will come around. If he's the nice guy I've assumed above. The OP may chose to buy things for SD, pay for treats and outings if she wishes, and that's a lovely thing to do, and she might want to reassure SO on that score if she is happy to do that as it will soften the blow.. The key difference is that it will be her choice, and it will be clear that that is an optional act of support and generosity on her part, and not an obligation or expectation, and she will not feel she is personally subsidising BM. Meanwhile SO is free to make foolish decisions about SD's expenses without OP having to worry about it, and without him feeling she is on his back 'being negative' (sarcastic face - I never realised how 'negative' I was until I became a stepparent, it's amazing how negative you become when you disagree with a misguided bioparent!) - but I digress, anyway that's my take on it.

I thought about what I would say if I were in your position, here it is if it's any use to you:

Look, we have tried merged finances and its not working, it causes more arguments and problems than it solves, and I don't want to be arguing about money. I love you, I've always been generous with SD, but we're not even married yet and you're acting like it's my obligation to combine finances and contribute to all SD's costs.

Fundamentally we don't agree about your decision to subsidise BM by paying for more than your fair share of SD's expenses. You don't want me telling you what you can and can't spend on SD, and I don't want you telling me I have to help to pay for things for SD because you don't want to get a contribution from BM. So the only sensible thing to do is agree to disagree and go back to having our own accounts which we manage as we choose. I'm not saying I won't ever pay for anything for SD again, I'm saying that that I have the right to choose when and if my money is spent on your daughter.