This is insane and the wife needs to leave in my opinion because he will continue manipulating her and make people chide her when she doesn't respond to his manipulative act. For her state of mind and sanity, she needs to leave. She works and he eats it up that's very sad. A story a bit similar to this got to me by one of my client. It's a crazy world already, marriage should be a peaceful bliss full of great love and understanding, not this.
That husband is a terrible human being...a manipulator and I agree with you, for the sake of her sanity, she needs to leave. She made a mistake of not seeing the warning signs but at least she has the chance to change things now and she needs to. If she were my sister, it's the same thing I would tell her. If he were my brother, I would tell him he should be ashamed of himself and if care is not taken, he would lose that woman.