Oh lordy, where to start with this one? Well, by saying that yes YABU and that I hope your Ex-SIL has good friends, given that she has no living blood relatives and her ex-husband and his family are so cold towards her 
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SO let's look at what you wrote OP:
"My DB works very hard and as ex SIL has no living family a lot of the childcare for their DS falls to our side, this is fine we are happy to have him and don't charge SIL. There has never been any animosity."
The word 'charge' jumped out at me screaming WTF. You said that as if you though that you were being so good not to. Why would you charge your SIL for having your nephew? She's said "I'm really sorry I did try to organise my working days to be on DB days off" but if your brother prioritises working over caring for (or even just spending time with) his son, then either she has to do it all or the rest of your nephew's family (you) need to step up to do his share. Please note, in this you are assisting your brother, not ex-SIL. Or do you think she should not work at all, so that when her son is grown up and maintenance stops she should live in total penury?
"he'd been a bit upset on her birthday which was a few weeks ago when his teacher asked if mummy had gotten anything nice. "
Yep, I can see that a nice child would be upset in those circumstances. When my DS was little, I used to buy a present for DH that DS could give to him. I didn't do this for DH (he was getting a present from me anyway) - I did it for DS, so that he could enjoy giving. Would it kill your brother to do this for his son? Given that you have stated there "has never been any animosity" ? Or were you talking just about yourself and there is animosity on your brother's part?
"SIL has always bought birthday gifts for our family from DS and herself presumably by way of thanks for our help."
Or maybe because you are the birth family of her son, and she sees it as a nice thing to do. Or because it's a social convention. Or she's trying to teach her son to be a generous and loving person. NOT as payment. (I'm seeing a bit if a theme here - that doing things for other people should involve a return.)
"AIBU to think it's not our responsibility, we're doing more than enough as it is and that the last thing a 5 year old is thinking about is a gift set for his mother? It's left a really bad taste in my mouth and makes ex SIL come across very passive aggressive!"
Strictly speaking it is not your responsibility, it is his father's; but he seems to take no responsibility? His mother is making sure her son will have the pleasure of giving her a present at Christmas, because she knows he was upset when he realised he'd not given her a birthday present. Children DO think about such things, but at 5 he can't plan ahead and get presents in; his father should be dealing with this, but obviously he doesn't so she's taking care of it. There is nothing passive-aggressive about this, she is simply making sure her son will be happy. As for "I would buy something if he had asked" well he's 5, he probably wouldn't think to ask until he was going to bed on Christmas Eve. He's 5! Should the responsibilty be his, at 5? Or should it rest with the adults? oh, and if you think you're doing .more than enough' - and that's a phrase that tends to be said whilst looking down one's nose - take it up with your brother, because he's the one that should be doing it in the first place.
You said that "she makes a bigger deal of [birthdays] than we do". Have you considered that you might be the ones out of step with the world here, rather than her? I don't make a big deal of birthdays but it doesn't stop me being aware of how big a deal they are to most children. And maybe that's why your ex-SIL makes a bigger deal of them, for your nephew. Or maybe they just are important milestones to her. Whatever, you are aware of their importance to her. Being so unimportant to you, and presumably your brother too, her birthday went un-noted and un-celebrated, and when your nephew realised this he felt sad, as children do. In the nicest possible way, get over yourself and stop turning your chagrin at yourselves forgetting her birthday against her and accusing her of having a PA dig at you. She's isolated enough as it is, you don't need to heap more troubles at her door.
"Just to point out, DB is up to his neck with work at the moment and I know she receives very generous maintenance from him"
There's that recurring motif again, that the only value that counts is monetary value. And what if your brother is up to his neck with work? In what way does that absolve him of responsibility to his son? His 5 year old son?
"Also last week my DM asked when we were needed again and she named the day and said I'm really sorry I did try to organise my working days to be on DB days off, but you know how that goes. My DM is fiercely protective over all her sons and ex SIL knows a remark like that wouldn't go down well but of course DM said nothing as she doesn't like to rock the boat."
WTF? What can you mean by 'fiercely protective'? SIL is being apologetic about asking for assistance, explaining that she tried to avoid it but couldn't because your brother abdicated responsibility to care for his own son and dumped it on the rest of his family again. So by my reading, your mother thinks the sun shines out of her son's arse and won't hear a word against him no matter how deserved? This is exactly how arse-shining sons end up thinking they can do as they damn well please and to hell with the rest of you particularly their wives 
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So OP, just on your own words, you have made your family look like a bunch of pricks.
My sympathies are with the ex-SIL here.