It's not only spiteful, but also smacks of cowardice on their part. They're running scared, OP, and of the importance that your Nan and her family held in his life over them.
Although I am biased, perhaps, as I can see a very similar situation unfolding in my own family - my mother was adopted by the only man I knew as my grandfather when she was 7, upon his marriage to my grandmother. They went on to have kids of their own, lived harmoniously together as a family, blah, blah, blah. My grandfather, because that's who/what he was to me, died 20 years ago and my grandmother was contented to live alone... until suddenly, a few months ago, she vanished. She spoke to my mother once a week, like clockwork, and my mother was making plans to go and visit her (there's hundreds of miles between my parents home and where my mother grew up)... until she simply disappeared. Of course, my mother was incredibly worried - like your Nan, OP, mine is in her 80s, now - and started to ring round trying to locate her, purely to make sure that she was okay.
My oldest brother discovered, through his in-laws, that the house she and my grandfather had lived in, was up for sale, purely by chance (his MIL drove past, saw the 'For Sale' sign and mentioned it in passing to my SIL). Enquiries were made, and we discovered that my mother's younger half-siblings had convinced my grandmother to leave the home she'd been in for some 60 odd years, and move 200 miles away to live with my aunt. And no one bothered to let my mother know.
Whilst I have my suspicions that my aunt is doing this purely to get her hands on my grandmother's money before she dies (it honestly wouldn't surprise me), it rankles. My mother isn't allowed to speak to her own mother. There's been no contact now in months - and that's likely to continue permanently - and she circles between being concerned for my grandmother's welfare, angry with them all for being so cruel, and grieving a woman who isn't (to the best of our knowledge) even dead yet. When my grandmother does die... will we know?! Will we be told?!
The last thing that my aunt said to me, when I asked her why they hadn't told my mother? "She (my mother) and you aren't even family!" Except... we are in both a legal (my grandfather adopted my mother - and we have the certificate to prove this) and biological (they have a mother in common, if nothing else) sense of the world. She's also likened us to vultures, because I asked if my grandmother was okay and whether it would be possible for her to call my mother.
Essentially, some people are shits, OP. 
for you and your Nan.