family drama

Sorry this is so long and I hope it makes sense. BIL (husbands younger brother) and SIL have a daughter. She is the first grandchild in my husbands family. From the day she was born they have not included my husbands side of the family in their daughters life. They didn't tell anyone her name until after she was born, they didn't want anyone at the hospital, they rarely let anyone hold the baby, no pictures on social media, (there was a picture of me and my husband and the baby was in the background and they lost their mind and made my FIL delete it) no kissing the baby, no buying the baby anything, they only want $$ for her college savings, they don't bring her to anyone's house or invite anyone over. On the rare occasion they do come to a family event which they are always invited, they stay for a half hour max, they don't put her down and they bring their own food for her, not baby food, like we had a BBQ and had a veggie tray and fruit salad and sandwiches and they brought her her own sandwich and carrot sticks, like ours weren't good enough. They make my MIL cry because she is barely allowed to hold her grandchild. We've bought her a ton of stuff when she was born, clothes and toys, we have never seen on picture of her wearing anything we got for her. Honestly we've only seen her maybe 6 times in her life and she's 2. Also, when she was born my husband and I weren't married, she would call my husband uncle but I wasn't allowed to be considered an aunt until we were married. Holidays are a nightmare because my in laws have to plan their entire day around my SIL's family and what's good for them. This situation makes my MIL and FIL so upset. They confide in us and tell us about how sad they are all the time. Six weeks ago we had a son. I have tried very hard to include my in laws in every step of the pregnancy. My MIL came to ultrasounds and was at the hospital the day our son was born. They've seen him at least twice a week since he was born, and we send them pictures and videos everyday. When they visit with him we let them hold him the entire time, kiss him, hug him. I figure if they didn't kill their three children they can handle mine. Well today we went to my in laws and my BIL and SIL were making a rare visit so we thought it would be nice for their daughter to meet our son. We also were hoping to actually meet our niece now that she's older and talking we thought maybe she would be allowed to come near us and talk to us. WRONG. My SIL kept her in her lap the entire time. My niece did not say a single word to us, she didn't even say hello to my in laws. If we tried to talk to her she looked away, she just held her bottle (yeah I said bottle, she's two with a full set of teeth) and sat on her moms lap. BIL held our son, SIL didn't want to, God forbid she puts her daughter down. It was so awkward I couldn't wait to get out of there. My husband and I left so disappointed because it's like we don't even know our niece, like we aren't good enough to be around her or something. She's our sons only cousin, they'll never play together, they will be strangers. The point of this post is, we decided we just don't want to be around them anymore, we have very different parenting styles and family values, and we feel terrible after every time we see them. We're not going to put the effort out if our niece is that uncomfortable around us. We just don't know how to break it to his parents that we aren't going to be coming around if they're going to be there anymore. I don't want them to feel like they're in the middle but I'm not sure what else to do. How would you all handle this?