Yes, that was fine.

You're the DM: you're there to challenge them and put them in danger, not to keep them all safe.

A lot of this comes down to the kind of game you all play. Statements like "dice rolls should never kill a character" or "you should never have hidden enemies" are total BS. Those are valid agreed-upon social contract items for your group, but they are not generally true statements. Players in my group would recoil in horror at the thought of having either of those rules in place.

Now, some of the problem may be a lack of common understanding of the kind of game you are all in, and it's worth a discussion about what you consider to be the parameters of your campaign - how can characters die, what kind of tactics are fair, etc.

Hidden Casters

This is fine. PCs love to put on Invisibility and cast spells, bad guys can too. I just ran a game two weeks ago where there were melee opponents and then an invisible summoner who was doing a lot of stuff. The PCs figured that spell effects don't just come from nowhere, made Perception checks, cast Invisibility Purge, bing bang boom. Of course, they're smart players... With the familiar, you telegraphed this pretty hard.

Mind Control

OK, players never like mind control, but there's 100 spells that do it and fear you or confuse you or charm you or dominate you. It's a part of the game. Also a valid tactic. Some people claim that this caused the other PC to die with "nothing they could do about it." That's patently false - they have as much as they can do about it as when they get attacked by any other threat (have a higher AC?). There's not always a specific "roll to avoid dying" in D&D. If this was a summoned creature or invisible creature or teleporting-in creature or any number of other things, it would be the exact same lethality.

Maturity

The real problem here is likely one of more of a combination of common understanding of what can happen in the game and maturity. I suspect you're newer gamers and perhaps young. I suspect some of these folks would "flip out" in the same way if they lost a big fight in a MMO or a basketball game, right? That's just general social maturity and what do do about that is out of scope of RPG.SE.

But there's also the issue of newer gamers not knowing all what could happen. If it's the first time they see an invisible caster, then it's quite a shock. Once you've been gaming 20 years that's instead like about the first thing you check for if anything unexplained happens. We have various "if person X gets mind controlled" countermeasures planned out. But for new gamers, the combination of the unexpected with general emotional trouble dealing with loss is a hard combination.

Once you get folks back, it may be worth using this as a teaching opportunity. "Yes, that was hardcore, right? You can do the same thing, be trickier than your opponents! Now roll a new character even more bad ass than the last one!" "Old school" gaming was a continual exercise in this exact thing - requiring you to actually think about what you're doing and not just run forward and grind - and people loved/love it. If they want to play a different kind of game ("I don't ever want to die! I want save points! And nothing should ever hinder my character, mentally or physically!") then you can negotiate the kind of game you want to run and they all want to play.

The Rules

It is always good to go back to first principles and look at what the rules actually say. From the Basic Rules (pp. 33-34) (Player's Handbook is identical I believe; p. 122), I have highlighted what I consider to be key points:

Alignment

A typical creature in the worlds of Dungeons & Dragons has an alignment, which broadly describes its moral and personal attitudes. Alignment is a combination of two factors: one identifies morality (good, evil, or neutral), and the other describes attitudes toward society and order (lawful, chaotic, or neutral).

[...] Individuals might vary significantly from that typical behavior, and few people are perfectly and consistently faithful to the precepts of their alignment.

Alignment in the Multiverse

For many thinking creatures, alignment is a moral choice. Humans, dwarves, elves, and other humanoid races can choose whether to follow the paths of good or evil, law or chaos.

Alignment is an essential part of the nature of celestials and fiends. A devil does not choose to be lawful evil, and it doesn't tend toward lawful evil, but rather it is lawful evil in its essence. If it somehow ceased to be lawful evil, it would cease to be a devil.

The overarching concept is one of choice (unless you are a devil etc.); to my mind, the alignment written on a character sheet is aspirational - this is the type of person the character wants to be; not who they are.

This contrasts sharply with the earliest editions of D&D where the consequences of consistently acting outside alignment were severe (loss of a level in AD&D - a fate worse than death for a character!)

The problem of Evil (and Good)

How do you recognize an evil (or good, lawful or chaotic) act? Are they objectively quantifiable or are they contextual?

The problem is akin to that addressed by Justice Stewart when considering pornography:

I shall not today attempt further to define the kinds of material I understand to be embraced within that shorthand description [hard-core pornography]; and perhaps I could never succeed in intelligibly doing so. But I know it when I see it, ...

Similarly, evil (or good, lawful or chaotic) is hard to define but I know it when I see it!

Part of the problem is that even after several thousand years of thinking about this stuff, there is no consensus of what "good" is: is it altruism, utilitarianism, liberalism, egalitarianism, something else? Similarly with "law", do we need: democracy, communism, feudalism, socialism, something else?

I contend that the ethical content of an act is a combination of its consequences and the intent of the perpetrator. This is reflected in most judicial systems: to be a crime the perpetrator must have criminal intent.

Under the RAW, an act done by an angel is both Lawful and Good simply because an angel is doing it. Equally, the same act is both Chaotic and Evil if done by a demon for the same reason. It is within the DMs purview to decide that there may be acts that one can perform which the other is incapable of but I argue that these should be the exception rather than the rule. For example, both should be able to comfort or kill a child in the right circumstances; in either case an angel acting for the greater good and a demon acting on a titillating whim.

When the act is done by a PC, things really get confusing.

Reading the description of the alignments as they apply to those with moral agency, it is clear that you do not have to be vicious to be evil nor does being good mean you can't be vicious. As written, good is synonymous with altruism, evil with selfishness, law with community and chaos with individuality. An evil character may kill with regret, a good character with satisfaction, what matters is the motive for the killing.

The Specifics

The druid is acting bang on to his personality, he has no reverence for society, either the broader state or his current companions: chaotic to the core. Although he is clearly putting self interest first here, it is clear that he does not consider depriving his companions of their "fair share" to be either evil or good: in his mind it doesn't hurt them and he can use the money for useful stuff like saving the forest. The question of goodness comes when the fighter or paladin needs the money for something - will the druid give it to him?

You give no information about the the paladin except his alignment. He is clearly not acting to his alignment; he is not showing loyalty to the fighter (chaotic) and is acting in the paladin's own self interest (evil). Oh well, the paladin set high ideals for himself and failed to live up to them, don't we all? Maybe he will feel guilty about his small acts of Chaotic Evil, maybe he won't. Of course, maybe he doesn't like the fighter, maybe he feels he has earned the extra money, maybe he feels the fighter would just blow it on drink while he can use it to help the poor (that is, the poor who are not innkeepers).

Unless he is breaking his oath (which he isn't because he hasn't taken it yet) there are no in game consequences. You have some interesting opportunities, however, when he does reach 3rd level: perhaps he can't take his oath. Some quests to find out why and to make amends might be in order, hmmm?

Summary

To my mind, alignment for PCs is a role-playing guide like traits and flaws. I consider them as aspirations of who the character would like to be and I don't see it as the DMs role to castigate them when they turn out to be someone else so long as everyone is having fun.

If you really want to meddle in this, then some positive reinforcement through inspiration when the character plays to their alignment at a cost is the way to go.