I can think of a lot of potential reasons your husband might be behaving this way towards his father. Perhaps he has a very good relationship with him and a very poor relationship with his sister growing up. Suddenly finding out his father was a pedophile wouldn't change that history. On the other hand, perhaps he also suffered abuse and can't face it so does everything possible to block it out, and is still being controlled by his father. Or maybe the idea of his father hurting a child is so repulsive that he is in denial, acting like his father never did anything wrong, and avoiding his sister where the evidence of his father's abusive behavior comes from... I could go on. But since he's not willing to talk to you about it, this is all just speculation. In some of these scenarios he could end up failing to protect his own children. And at the very least I'd want to have good lines of communication open with my partner before we brought children into the world together. I think at least understanding your husband's odd behavior would come first.

As for whether or not you're being irrational - I don't think so. As a mother it would be your responsibility to protect your children. Not wanting your children exposed to pedophiles (especially ones who seem to have not gone through any rehabilitative process and relatives with a history of incest) definitely falls under that category. I wouldn't compromise either regarding letting the kids see his dad. I would also require your husband to be on the same wavelength with you before becoming pregnant (a "yeah, okay, whatever" would not cut it because we all know what that means).

Your decision not to visit the man needs to be respected as well. However, while I think it's important to understand why your husband sees his father so much, I wouldn't stand in the way of it. Since you're both adults, deciding whether to visit or not is your own individual choices.

I guess, in summary, I would want open and relatively nonjudgmental communication with very firm lines drawn.