ZingWidge - I don't think it's a case of forgive or hold a grudge.
I haven't forgiven my PILs, but I don't hold a grudge either.
They pushed me to breaking point and made me ill over a period of months and years. I cut them out to protect myself and my child rather than to punish them and it has helped.
My relationship with them is dead now. I don't have feelings for them, not even ones of dislike or hate. I feel nothing for them. It's a shame for DH and it may all rear up once DS is older and gets curious about them but at the moment all they are to me are people that I used to know, who I don't want to know any more.
Susan Forward has written some interesting things about forgiveness in her books, Toxic Parents and Toxic In-Laws where she is of the opinion that forgiveness to someone who has hurt you does not have to be part of your healing process.
Many people torment themselves over not feeling ready or able to forgive and SF is quite firm about the fact that forgiveness doesn't come at the beginning of a healing process and might not come at the end of one either, furthermore she doesn't believe forgiveness is necessary or always deserved.
I agree with her.
My PILs were and still are awful. They've affected all their children, one is now an alcoholic and drug user, another is emotionally reserved and has emigrated, the third has never had a functioning relationship but has picked a series of users and abusers and the fourth, DH, believes that he is responsible for his parents emotional wellbeing and must do everything they ask or cause a mental breakdown. He's suffered from self-esteem and anger issues because of this.
All four have spent their lives struggling against their emotionally abusive, controlled upbringing and PILs have held them, and now the extended family, to ransom with emotional blackmail, tantrums, anger, threats of disownment and withholding love and support until they get their own way.
One of their most bizarre family stories is the one where DH's pet rabbit was ill and instead of taking it to the vets they had a neighbour break it's neck and then leave it for DH to find. Then they laugh about how he came inside to tell them it was dead and then ran upstairs to cry. They have a lot of stories like this, including a really funny one about their friend in the army who would go away for weeks on end but they always knew when he was home because they'd see his wife with a black eye.
I feel into the same pattern of being controlled to keep the peace and probably still would be doing so, if not for the fact that we lost our son to stillbirth and MIL took it upon herself to subject me to a barrage of nastiness including asking me, three days after our son was stillborn, if it hurts to give birth to a dead baby. We later lost our daughter to prematurity and again MIL was deliberately cruel, eventually making comments about our children not being proper grandchildren, not counting as family and wondering aloud if our daughter was born with a whole face or with bits of it missing.
When I told them this was unacceptable and I would no longer put up with their nasty behaviour they spent months pretty much stalking me and telling lies about me and trying to convince DH to leave me, not by saying anything outright but by telling him lies about things I had supposedly done and said to them. None of them were true.
They tried to split up my marriage, not caring that by then we had a baby DS to consider, because they were not used to having someone stand up to them and say enough was enough and they didn't like it.
And when that didn't work, they deliberately started to interfere with our babies grave, taking fresh flowers away and leaving strange ornaments that looked to be stolen from other graves, putting things inside the metal holder that goes in the vase, balancing weird objects on it. It was like a bizarre version of an animal marking it's territory by pissing on something. They were marking our children's grave to let us know they had been there, taking away the things we had left and doing what they liked with it. We had to get the police involved before it stopped, and still I feel on edge and stressed whenever we go to the cemetery in case they have been back and done something odd.
It's upsetting because I feel like my children are being used and hurt, even though they are dead, and that I can't protect them because they are buried in a public place and I can't stand guard over them 24 hours a day.
Can I forgive all of that? Not yet. Maybe never. Do I still bear a grudge? No. I'm just glad that they are out of my life now and that they are not yet able to drip their poison onto our DS. I hope they never can. Do they deserve forgiveness? I don't think so. And OP, is it cruel to cut these people out? Not as cruel as they would still be being to us if we hadn't.