I agree with the OP, but playing devil's advocate...
If it turned out that the landlord decided to charge everybody entry that night to cover the band costs but didn't give you any of the ticket money, would you be ok with that?
If so, then what if he made the tickets optional and punters could pay whatever they liked - would you be ok with that?
If so, then what if he decided to collect the money at the end of the night instead of upon entry?
If all that is hunky dory, then I suppose the only time it becomes not OK is when he says "this is for the band" instead of "this is to pay for the band"!