Ordinarily I have no problem with people suggesting the scaling back of gift exchanging. It can get very expensive and burdensome for many. However, in this case, it seems that you are expected to buy gifts for the other couples' children, so you will be the only people not "benefiting" (so to speak). It's a delicate situation in that you don't want it to appear that you're just out for gifts, but there's something askew about the suggestion.
I like the idea of a family gift - each family unit gives a single gift to each other family unit. You could suggest a price limit too, in order to relieve the financial pressure some of the participants might be feeling. The "family gift" could be something as simple as a keepsake Christmas ornament or board game, or a craft the family could do together, or a pack of movie tickets or something. This kind of compromise allows you and your husband to participate in the fun while still holding down costs for everyone. Do you think your friends would go for it?