Personally, I couldn't be with a man who could not, and would not, parent his children.

And, his kids are only 7 & 10? There are several years until there is even a glimmer of hope of them launching. Ugh. By the time I was your age, my SD was 19 and married and not our problem!

Only you can make this decision.

If you disengage and stop doing for them, with your SO step up and parent them? Or will he just sit back and let them take over your home? That would be a deal breaker, for me.

Unless your husband is prepared to parent his kids, you are going to do all the heavy lifting. I am/was married to a free range parent too. Laid back, hands off. Only I wasnt allowed to discipline or correct his son. (Older than your skids in the time period around 14 to 17). If your husband doesnt care now about the behaviour of his kids, or plan to do anything about it, it is doubtful that years down the line he will. I wish things would be different for you, but lazy Dads who can rely on wife to parent difficult children has no incentive to change.
 

Making things uncomfortable for DH by "disengaging" from the children may work. May make him take care of his own kids because they arent fed, cleaned after or even noticed by you. The only thing disengagment did in my case was make things worse as NO ONE actually minded SS and his out of control behaviour. My Soon-To-Be-Ex-husband (STBXH) is one of those people who worship and adores his kids and any discipline or control is "too strict".

Your husband may be a wonderful man - and part of that is parenting his own kids. If not, the "wonderful" is an overstatement of a one sided view of who is. One of the roles he should be  playing  is that of  parent. He is doing a rather shoddy job by your account. In the end you will decide how much you want to tolerate and for how long. My long term view was I was no longer going to be used. I am getting out of the dysfunction. 
Good luck on your journey.

I have long struggled with the tendency for so many to not incorporate parenting in their guage of wonderfullness in a partner.  No one can be all that great if they let children or an X run all over them and ruin their relationships.

So, based on that, write this guy off as the parental failure that he is and move on to the next phase of your life adventure.  Learn from this and never again assign the status of wonderfullness to anyone who is not also an effective parent.... if you chose to give another parent a try as a partner.

What does your partner do? How many lunches does he make? How much parenting does he do for his kids? Sorry, but it seems like a lot of guys have some pretty strong gender expectations about who looks after kids - even if they are not the woman's own. I do look after my stepkids, food, family activities, etc but I rarely have them when my bio son is not around as well and it's not like I'm the only one doing stuff. If I do more than 'my share' for his kids I always get tons of thanks and appreciation - just as I try to thank him and let him know how much I appreciate his support for me when he helps me with my son in more than a 'boyfriend' way (not that I don't appreciate that, too - but he goes above and beyond). 

You have every right to feel resentful, but it's not the kids you should feel resentful toward. I'd suggest relationship counselling sharpish 

I have been feeling like a crazy person lately, and am in a similar situation. I'm 47, a new step mom (known the kids and lived as their step for 2 years and 4 mos). My wife is wonderful! VERY loving, caring, etc. But rather permissive. She feels that I am nitpicking if the girls (9) eat with their fingers (they can't use knives), don't bus their dishes, leave their shit everywhere, and negotiate what they have to eat at every meal. But here's the thing: perhaps it IS nitpicky, but it all lies in a greater problem -- they are indulged and lack gratitude. I just don't know if I want to be a part of 'raising' kids like that. 

I wish I could say things will get better, but from my experience they will not get better. They don't have behavioral issues like that, but definitely issues. DH now refuses to discipline them because after close to 4 years of not parenting them, he has started to feel guilty and now just gives them everything. We used to agree, or so I though, on a lot of things. We would talk about no cell phones until 16 (depending on the kid), now his 12yo has had one for a year, and I am pretty sure he is getting his 10yo one next year. We are drifting so far apart because of his children. We have been married for five years now, together for 7. I am starting to put thought into leaving. I can't see my life continuing this way. He is with a woman whom has viewed a family very effetely than how he views a family, but no matter what he'll get his family because they are his children, not mine.