I’ll start by saying I do not like my MIL, so I can understand your feelings towards her which you’ve made quite clear.
Ultimately, you and your DH need to decide your plans. Do what you both want. But there are things you should factor in when making your choice...
I think your anger is directed in the wrong place with respect to the 6 years DH had Xmas with his parents. He is an adult and made that choice. I can “demand” a million pounds from the bank... doesn’t mean I’ll get it ! Your DH chose his mum over you at Xmas for years, but that was his choice. He chose not to be there for you, particularly when you felt you needed him when grieving. It is pretty much universal on this thread that this is where the blame lies.
Sorry if I’ve missed this but what does your hubby want to do ? It’s unfair of you to demand Xmas with your family every year if he never gets to see his (assuming he wants to). You’ll run the risk of him resenting you/your parents in the way you resent his if you insist on ignoring his wishes.
Rather than alternate years between families, maybe you could pick one year and DH could pick the next ?
You could host his family for something less formal than a sit down dinner - maybe evening buffet type thing - and move out your table for more room. If this offer is declined, at least you’ve tried.
Also - just because MIL demands an extended stay doesn’t mean she gets it (see above point regarding my million quid). Why not offer to go to hers for one day - again this is quite reasonable and if she doesn’t accept then at least you’ve tried in your DH’s eyes.
You also keep saying your MIL never wanted you to have your kids. I can totally understand how awful that must have felt and how angry you were/are... but does she treat your kids well ? I suspect this may be a bit like contact with an ex - if she treats them well, is it not in the children’s interests to put your feelings aside and let them benefit from a relationship ?
And she is not the first person to make a mistake when hearing a pregnancy announcement - many fathers do this but people work their way through it and step up. Has MIL ? If so, you need to work on getting over it. If she and your children want a relationship do you really want them to know the details of why you are preventing it ? People make mistakes - if she’s sorry, and she sounds like she is if she wants to see the kids, then work on moving on.
It is difficult to say ultimately if/how unreasonable your being here but I think your anger is misdirected and that anger is colouring your judgement.
I’d say the key point is look at how this is affecting your little family unit, your DH and kids (once older) before deciding.
But then again, if she’s truely toxic perhaps your anger is justified but you’ve given the wrong impression by focussing comments on the 6 years.