I know hindsight is a wonderful thing, and perhaps being clearer about all the expenses involved, and who would be paying for what, at the start, before flights, etc, were booked would have been wise.
However, from all that you have posted, Eglantine, it reads as if your 'friend' was being quite manipulative, and using you as a convenience. For you to have the impression that you would spend the three days together seeing the sights and eating together at night, for it to be changed by your friend to just you spending the evenings together with you paying for the meals, smacks of manipulation on her part. As others say, I wonder just what she planned to do during the day, whilst I assume her husband thought she would be with you?
You did the right thing by backing out, as the whole agenda had completely changed.