I wouldn't worry about it. It's unfair and the MIL needs to stop being childish with her 'upset-ness'. I think it's actually important for people to get mad and have arguments, that is how we settle things. We can do it nicely, but it seems like the woman you're describing would get away with it. It's immature that she can get away with something just because she'll get upset- who CARES if she gets upset? YOU are the one that's upset! She shoudn't get away with this just because she'll be upset, that is a horrible excuse and I don't see why the family accepts it.
I wish you the best of luck with your grandchildren and I hope that MIL shapes up soon!
I think what you did was the nicest way you could put it, and it's not your fault she didn't come to the party, it was her decision - she's just trying to make you feel bad so she's the one that's right and you're sorry. I used to have a friend like this and she was the same way. (when i stepped up one day she left the school
)