Yikes! I have a MIL who used to talk like that when DH and I were just getting together but once we had kids, she got much more controlling and opinionated so DH took the matters into his hands and it actually led to him cutting her out of our lives all together. It still unsettles me but we have an agreement: If my family oversteps their bounds, I speak to them. If his family oversteps their bounds, he speaks to them. It's been so much better since then.
Everyone needs a release, something just for them. Even if she's not a quilter, she must have something that she resorts to, besides bitter talk, to help her put things in perspective. Thankfully, we have this board to vent on, instead of venting back to her. I agree with IrishNY though, (perhaps because I'm and Irish New Yorker :-) ), leave an extended pause there. Her own conscience should let her know she's overstepped the bounds.