I agree, if his parents are footing the bill, you might have to bend a little. If not, then it's your call.
Who are these people? Family, friends, business associates?
A good rule to follow is if you haven't been out to dinner or seen this person in 6 months, you do not have to invite them. Obviously the rules are a little different for OOT family, but that might avoid having every neighbor and your graduation high school class on the list.
If his parents are stil insistent that the list grow, tell them it is $100 pp (or whatever the cost is) and ask them to pay.