I definitely agree with most of the points made here - it's not so much about what 'gadgets' you can buy your kids, but what financial freedoms can give you and them. As with all aspects of parenting, everyone's idea of what constitutes a good standard of living is very different, and I absolutely respect that - I may not 'believe' in private schooling or kids sharing bedrooms, but to each their own, and my desire to give my kids certain things over other things comes purely from my memories of childhood.
My DH and I had vastly different upbringings - he was raised by a single dad who was mostly unemployed (as they lived in remote areas with no child care facilities and FIL didn't have support networks like friends or babysitters, so had to stay at home to look after DH), and DH is still greatly affected by his memories of being picked on for wearing daggy shoes and not being able to go on school excursions due to financial difficulty. Because of that, he is determined to work his backside off in order to make sure his babies don't suffer the way he did. Character-building or not, being bullied for being 'povo' isn't at all fun and I wouldn't wish it upon anybody - I know DH would rather die than see his kids go through what he did as a child.
AFM, I was brought up in a relatively middle-class family - my parents didn't 'believe' in brand names or fancy trimmings but we always had new clothes, plenty of books and toys and went on holidays so often that I used to complain about it ruining my attendance record at school (we would usually leave at lunchtime on a Friday to beat the traffic, and on many occasions I was off school for a week at a time because my parents had planned a holiday during the school term). These weren't 'fancy' holidays, and I've never even been outside of QLD my whole life, but we were always off somewhere, doing something (usually car rallies or attending friends' and relatives' wedding, funerals, christenings and milestone birthdays etc), and while it had its good moments, I don't really want to always be dragging the kids all over the countryside either, so one holiday every year or two would suffice
As a result of my childhood, I also am reluctant to 'lower' our standard of living in order to accommodate more kids - I've never had to share a room with a sibling so the idea is a bit 'ick' to me (not that there's anything wrong with it, I know, but seeing DD1's bedroom I can't imagine trying to cram another kid and all the associated junk in with her - we'd probably lose a child in the piles of discarded clothing!). I did just fine with a public school education, so I don't see it as necessary to scrimp and save in order to pay the fees. Whatever money we have spare, we put away so that if our circumstances change, or if as a PP said, a child shows a special talent we'd like to develop further, we have the freedom to do so.

As far as the financial side of things goes, I do believe we could afford another baby. BABY, that is. As they get older, they get more expensive, and I'm already having nightmares about the bills for senior formals and making sure the girls are 'up to speed' with their peers when it comes to fashion, makeup, etc etc. My parents didn't exactly spoil me, and I don't blame them, but I did get picked on in high school for being daggy - Best n Less gear is great when your kids are too little to know any different, but when you get to high school and your mates are all shopping at City Beach and you're wearing your big sister's hand-me-downs from Big W... well, let's just say you don't give a stuff about how much love there is going around at your place, you care far more about what your school friends think. And if they think you're a dag, you figure you may as well be living in the backseat of a car and eating out of rubbish bins, kwim? Not that I intend on buying my girls Louis Vuitton handbags for their 13th birthdays (rip-offs, maybe ), but I do know that I hated being the 'pov' kid in my class at high school because my parents could afford to buy fancier stuff but just didn't think it was necessary.

I also strongly agree with the need to have enough energy to go around, too - juggling two kids is a real struggle at times when combined with housework and other day-to-day stuff, I honestly do not think I would be capable of functioning if I were caring for any more kids! My kids don't only need money to thrive, they need their mummy - and one that's firing on as many cylinders as possible. I sometimes think it would be a good idea for me to return to work to provide better for the family, but then I wonder about how I would then cope with young kids, running a household AND keeping my boss happy... and until I'm 100% sure I can handle the strain, I just won't do it.