I went through this as a secondary also. I really didn't want them to split up as they had two beautiful kids but I found out I really wasn't welcome to try to do anything to make things any better. The problems in their marriage were deep rooted and had more to do with other issues than their both dating other people. Maybe something like that is going on here as well.
Her problem with him is just that, hers, and I think you've done all you could possibly do to ameliorate the situation. You didn't mention that there had been any sort of agreement as to under what conditions his seeing you would be okay with her, so I assume there wasn't. The only situation where I saw someone say they were dating another person and "take it or leave it" was doomed from the start.
Have you talked to her? Would that help?