Well, you have talked to him about it and he basically just wants you to do it or let things go as they are.

The only thing you can do is change how you feel. If you can't be happy doing all the parenting for your dh or let go of caring about large dental bills, bad behavior, etc, then no, nothing will change. 

Can you live like this for the next 12+ years? Are you ok having children like this influence your daughter?

I could not sustain love and respect for a man who neglects his children in this way, and refusing to parent them is neglect. Nor would I pick up the slack for him because he's lazy and doesn't want to do it.

Your DH is no where near an equity life partner for you.  Worse, he is a waste of skin parent.  Who lets their children's teeth rot out of their heads and does nothing about it on a daily basis until massive dental work is needed?

Boot this shallow and polluted gene pool to the curb.  Quit serving yourself and  your child up as the sacrifices on the the alter of blended family martyrdom.

That drives me nuts that some bio parents can't even see things with their own childern. I find it quite common for the bio parent to think you are picking on their kids or that you hate their kids. 

My DH was exactly that too, at least his kid was older when we got together and I did not have to but up with him as long as some step parents do. 

At the one of the houses we lived in my DH could stand the neighbour's adult kid. He dressed like a punk, has an attitide, use to spin out of the culdesac in a huff witih the music blaring in the mornings. We nicked named the kid Jersey (AKA Jersey Shore). My DH could not stand the kid. The kid behaved exactly like his kid did when he lived with us at 21 years old even dresses similar. One day when he was bitching about Jersey, I reminded him that his kid did the same at that age, even told him that Jersey is almost the spitting image of skid24. He stopped and thought of it and I think it clicked that I was right about it. He stoppped complaining as much about Jersey after that. .lol.

"When I bring these issues up with my husband,  he tends to get mad and say that I just give my daughter special treatment, and that his kids will never be good enough."   --been there. He's deflecting because he knows what you're saying is right. There's probably guilt there and to assuage his guilt he spins it so it's just that you don't like his kids and you are over-protective of your own.

"This isn't "special treatment" I just give a damn about my child."  ---yup, you are doing what is called parenting.

"Anyways, I guess what I'm looking for is advice on how to handle this?"  ---you're going to have to pick your hills to die on and let the rest of the shit show go (and vent here).

"How do you all handle parenting differences?" --it's a fight or it's a truce (sometimes it's a truce he doesn't know has been called because you just stop fighting). You may have to take your child aside and explain that there will be difference. I did.

"Is this something that can get better?" --no, not unless you analyze it microscopically.

"I know we can't change our ex's, but is it crazy of me to think my husband will step up?"  --yes. I'm crazy, too, because I  expect that and it doesn't happen--many times because he says he's going to do something but doesn't. Which drives me crazy. (See the endless loop?)

My DH didn't step up with the dental hygiene until he said something about me being lucky that BS brushes his teeth and I don't have to worry about it. Like it's a personality trait. I told him it's because I brushed his teeth when he got teeth and had him start brushing when he was big enough to stand on a stool at the sink. It's not luck. It's parenting and making it a habit. I said something about 10 years of having the skids in his house to get them to brush regularly and now he's down to a single year to get OSS to make brushing a habit before he graduates and leaves for college. DH stepped up. He grumbles about checking as much as OSS grumbles about brushing but it's happening (mostly).

Is marriage counselling an option? Because basically you guys need to make a up a new rule book for your family and if it's leading to fighting - maybe some kind of mediation would help. 

Also when drawing up a new rule book you need to be able to throw out some of your own rules as much as this may be difficult. I am the laxer parent between me and my partner. I had to adopt new rules and standards for my household that I had to enforce on my son. It isn't easy. There you are trying to blend a family and which is something the kids didn't choose and which isn't easy for them and then you have to go and add in some extra rules and then actually follow them up. It may be good for them in the long run, but they sure won't like them in the short run. 

On the other hand, my partner had to lighten up on some rules (as well as adopting some of mine). Some rules are good and important (teeth brushing), but some rules are there because you've always done them (I don't know what they are in your house, but you probably have some). While those 'always done them' rules aren't a big deal in an intact family (usually) - they can cause rancor in a blended family.

Well, as you already told many times your husband and it is not working so it is the right time to talk with your kids and let them aware that how they are got infected with bad habits. Just try to remember them how they feel when they are with dentist there is so much pain and how good habits give benefits to them. Try to not send your kids to that place where they are spoiled. This is the right age where they understand that what they want to do. Sometimes talking with kids solve all your problems, so try it out.