Coming from Asia where you generally move out when you get married, you guys are wilding and sound insane to me.

OP's clearly not from Asia so I am not sure why you're imposing your value system on OP.

Hope you know all these expectations are arbitrary.

No, they're not. Expectations are based on society, cultural values, and family/personal constraints. Even in Asia, it is not unreasonable to ask a 23 year old to start doing better financial planning for themselves and learn to be an independent adult.

Also crazy to me that a baby needs their own room to begin with, another thing that’s different here.

Again it is perfectly reasonable to need a room for a newborn infant. This is not some batshit crazy requirement.

OP and husband should at the very least have thought about whether their current lifestyle (step-daughter included) is feasible before welcoming another baby into the world.

So let me guess your verdict on this. If OP wants to have a baby, they should wait until the 23 year old chooses to get married? Say that's another 10 years? And it is their "duty" to continue financially supporting their kid until the kid turns 35 or gets married, whichever comes first?

Oh wait, what if the daughter chooses to marry someone who cannot support themselves. So now it is OP's responsibility to support both of them for life??