Which would be fine except:
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we live on a different continent and it costs a bloody fortune to post them (over £50 for a small parcel) and no, she isn't offering payment!
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her DD is less than 6 months younger than our DD so we would have to send pretty regular parcels to ensure that they actually fit her DD when they arrive... And because they're so close in age, a lot of the clothes we would be sending would still fit our DD too! So we would be sending clothes that our DD could still wear, just for the sake of sending something, iyswim.
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She got upset because DH mentioned on a video call that I had to bin a dress of DDs because of poop explosion when poorly which had rendered the dress unwearable (had tried to wash it but still came out stained and gross) - SIL insisted that next time this happens we must sent soiled items to her? Which I'm not at all comfortable with - it seems really weird and disgusting to send filthy stained clothes back for her DD? And an absolute waste of money? I'm not a wasteful person but there are some times where baby clothes just need to be binned , as I'm sure you all know!
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I'd kept some of DDs very special outfits like the outfit we took her home from hospital in, her 1st birthday outfit, her outfit from our wedding, and a couple of bits bought my family members which we have such happy memories of her wearing and thought it would be lovely to keep, just to look at in the future, or show her - although if I'm being honest they're basically just for me to cry into in 20 years when I'm sobbing on the sofa with a glass of wine because she's moved out for the first time to go to uni or something 
!). But SIL is really upset about this and says we should send all these to her DD.
I've already explained to her about a million times that it's not really practical to send the clothes and that we would be having to get rid of stuff we would still be using or want to keep which we don't have the cash to do. For the record, she is married and she and her DH are much more well off than we are. She adores DD and this is why she wants her clothes - because she loves the idea of her DD wearing our DDs stuff. Which is sweet but a bit unnecessary. She has a huge family on both ours and her DHs side with lots of other children and babies so it's not like DD is the only baby she has contact with - I suppose I just don't really understand or appreciate why it's so important to her and why she thinks that her desires for her DD to wear my DDs clothes trump our lack of money to post them or the fact that we still want most of the clothes!
DH is a bit frustrated too but thinks she's just being sweet. But I'm just getting a bit bored of having this conversation with her, and I'm starting to wonder if I am being unreasonable?