We have both scenarios in my family -- from the same family members. My Dad's bother had their two sons before I was born. Prior to the second son's birth, my Dad told his brother that if he and my Mom ever had son, he would be using his own name for the boy. But my uncle went ahead and used the name anyway for his second son. This caused some minor confusion over the years, as we all lived in the same town, and the three guys (my Dad, my Cousin and my Brother) had the same first AND last name.
On the other hand, when my Mom finally got pregnant, the same Aunt told my mother, "I plan on using the (girl) family name if I ever have a girl, so please do not use it." My Mom then had me and named me something else (which is very nice, of course!) However, my Mom spent some years resenting the fact that she was "told" to not use it...ESPECIALLY since my aunt never had any other children (and they had already poached my Dad's/brother's name.)
Having seen both sides of this issue, I knew I would always name my child whatever I wanted - regardless of what anyone else named theirs. And if they chose my favorite name first, so be it -- I would still use it. Unfortunately, you really can't do anything about what another person is dead-set on doing. It definitely did not break-up the family, as my Dad decided not to let it be an issue. My Uncle and Aunt are like my second parents, and my cousins were like my two older brothers. It will only be an issue if you or your husband let it be an issue -- it's your choice. I hope your husband's feelings can mend over time.
PS: I think some posters are being much too hard on your husband. Many men have strong feelings about sons, birth-rights and carrying on their own family name. Personally, I would not tell your husband he is wrong for having his feelings, that he is being a baby, or to "grow-up." This will not be productive and could hurt your own relationship with him. (None of us want to hear our husbands tell us to "grow-up" over things that are important to us!!) I think the best you can do is to let him know that you understand how he feels, but that you are really hoping that your children will be close to their cousins. Family is so important -- the more people we have loving our children, the stronger, healthier those children will be.