I'm sorry, but if someone is purposely being an arsehole, they deserve to be called out on it. Why should OP have sat there and said nothing?
A card costs pennies, and at the most, a few pounds. The rest of the gifts were cheap, used tat. This is nothing to do with not being able to afford things- it's a purposeful attempt at trying to make others feel like shit and bring them down on a day when the attention is on them, and not the person in question. If MIL was in dire straits, I highly doubt OP would have asked about a card. She asked because she has form for being this way, and she deserved to be called out and embarrassed for it.
Some don't seem to get the signficance of asking about a card. Let me clarify for you. A card would have been evidence of actually buying a suitable token for a birthday, and thinking about the event in question. Offloading items not fit for more than the bin is not worthy of counting as an attempt at being generous and celebrating a birthday.
I see MIL threads on here every day. Some seem genuinely terrible, others seem fairly harmless. This one is one of the terrible ones. I, like the OP, couldn't sit back and let someone treat my children with the sheer amount of disrespect this woman has. It isn't about getting people to buy your children expensive gifts. It's about thought and genuine care. If her MIL couldn't afford anything, that wouldn't be an issue. She could easily have rang to wish her daughter to wish her a happy birthday over the phone and had a nice conversation with her. Instead, she turned up with a pile of worthless shite and had the audacity to cause a scene because everyone didn't bow down to her and her pathetic ways.
OP, downgrade her present even more. Get straight to the reduced section of a bargain shop and purchase something that is dog-eared and preferably has stains or blemishes on. From the entire family. Then never bother with her again. People like her deserve a taste of their own medicine. Maybe when she's older and needs help she'll realise that fucking off her entire family with her pathetic little mind games wasn't worth it.
But, hey. She made her bed. Let her lie in it.