I'm a biomom with an XP (biodad) and DP (stepdad) both actively involved with DD. She lives with DP and I, but sees XP about 6 times (and one ovenight) a week. We're (DP&I!!) planning another baby soon. My parents were married to one another and my brother was my full-sibling (also have 4 half-siblings) and it STILL wasn't fair! I think focussing on fairness as an arbitrary thing that can be counted like photos is only going to make the kids see these things a) all the time, and actively look for them and b) really quite shallowly. Love is NOT pictures. Love, as you know, is sleepless nights, worrying about things or BFing or cuddling nightmares away, driving when you're shattered to make sure they get to/from activities/home, finding another ounce of inner reserves when you thought you were empty so you can give them what they need. None of those things can be doled out "evenly" - you cannot BF your big DSD, nor can you set and alarm clock to make sure you don't spend too many minutes worrying about one and not the other.
I really think counselling is the way to go for you and DH. He has serious issues in this adjustment and whether his behaviour is "ok" or not with any of us, it is stressing you out and that will affect your kids, step and bio.
Him saying you can't have one additional photo of DD is as strange as you were to say DSD's dance pic has to come down until DD can dance! Some people are more "just so" about this, but for me, unless our kids are talking about it then i won't be focussing on it. You can't put a bigger pic of DSD up because you don't have one, not because you deliberately didn't get one because you don't love her! And you don't have dance pics of DD because she's not old enough to be able to dance, not because you don't love HER.
I really feel for you, it sounds like there is a bunch of craziness going on in your home and you're spening half your time hurt by it and the other half wondering if it's YOU who's being unreasonable. I have been there! It's hard!
The bottom line is that you CANNOT go on being punished directly or indirectly for the pain he *thinks* DSD may suffer due to the arrival of her new sister. His guarding and hostility is only going to make her more focussed on the rivalry and not the joy of being a big sister.
On a personal note, i have almost nothing in DD's baby book beyond 6 weeks, because 2 weeks after that i split from her dad, 8 weeks later i moved out and the months following were a tough journey of poverty and hardship trying to get a good enough relationship to XP going and getting to know my new DP who she didn't spend any time with for the first 12 months of our relationship (even though i'd known him for 5 years before we got together). I had nothing to write that wouldn't have been about how hard life was, how difficult her father was making life, how poor we were. I don't want her to read back how bloody terrible it was having her because i adore her and never, even in my darkest moments, regretted her being with me, but equally i have no idea the face she pulled when she first got food into her mouth, or the exact day she cut her first tooth bcause i was too busy making sure we both survived. I would have loved to record all the normal joys and stresses of her babyhood, and i will hopefully be able to do so with the next, but if they check, later on, and compare, there will be no "equal" there. Life is NOT fair.