I can see both sides of this.
OK, so first of all, when you start building a family tree, you can pretty much go on indefinitely. In fact, on one of the main sites, Family Search, the idea is to create one huge family tree, so if you find someone in your family tree and a separate record for the same person in someone else's family tree you're supposed to merge the records and join the two family trees up.
Ancestry, which I presume is what they are using, isn't like that in the sense that you build your own family tree. But you aren't limited to adding your own blood relatives and in laws. So if you add, for example, your brother's wife, it's quite likely that the site will automatically start giving you hints to add her parents, and once you've added her parents, her grandparents and so on.
Because it can stretch on indefinitely you kind of have to decide which direction you want to go in. Some people like their tree to stretch quite far horizontally, which would include lots of distant cousins and in laws who are still alive, whereas others are only interested in their ancestry and finding their own direct ancestors as far back in time as possible.
So, I don't think it is necessarily wrong that they have added you and your relatives to their family tree. A lot of people do this and the information is all out there in the public domain. However, passing on information which you may not want to discuss or which may be inaccurate (as others have pointed out, they may just have lifted information from other people's family trees which may contain mistakes), and saying things to vulnerable family members which may be upsetting to them, is not on.
I think there's a balance to be struck between building an extended family tree based on publicly available information, which is fine, and using that information in a way that could come across as nosy and intrusive to people who are not interested in your genealogy research, which is not fine.
I would just discuss this with your DD and ignore your SIL and her husband.