Are you guys seeing a urologist who specializes in MFI? (The fact that he uses the old scale as opposed to the Kruger scale kind of tipped me off that he might not be.) Do you have a reason for the MFI? (ie: has a varicocele or partial blockage been ruled out? How is his testesterone?) There are a few other treatments other than supplements that you guys can try, so I wouldn't give up on that just yet.
My REs cutoff for morphology is technically 4%; however, they don't generally do a number for morphology readings at our office (just a description of issues). So morphology isn't necessarily a huge deal when it comes to MFI. (Yes, it can be, but it doesn't automatically spell a death sentence.)
That all being said, we did one IUI cycle to see how I would respond to ovulation stimulation. (We did injects so that it would be closer to what an IVF cycle would be like, since it's pretty much inevitable for us.) We learned alot about my cycle from it, and I think that it was definitely worth the money! If it's only going to be $150 OOP, it's definitely worth a shot! I'd see about using injectables too, so that if you do move on to IVF, you'll have a better idea of what you're getting into (if you haven't already done injects yet).