Who is in the wrong? ?

Men often make these lame sexual jokes.  So he's a jerk, so what?

She shouldn't have overreacted. 

He's self-centered and she's emotionally insecure.

Both are wrong.

But both deserve each other ... a well-adjusted person would have nothing to do with either of them.

We cannot know if the wife reacted at all.  Let alone overreacted.  We cannot know if it was said in jest. Often such things are part of the banter between friends.  "Right and Wrong" seem irrelevant as far as what you have told us.

I don't know why anyone would care, let alone over react.