I just want to add that I grew up with a dad with a mean sense of humour - in his 70s, he's still like it.
What he doesn't realise is that just as he's got older, and is less likely to change, so have other people - and instead of tolerating him, they just avoid him.
Unfortunately, both me and my brother grew up thinking being mean was being funny. We've both lost friends - and we've both, as adults, had to really work on this less desirable personality trait.
Neither you nor your husband are doing her any favours by not addressing this with her now, while she's still young enough to let go of it more naturally. Her friends might appreciate it now, while they're young, naive and find lots of things they might get in trouble with "funny", but they won't always.
I absolutely wouldn't be "roasting" her back as some have suggested, but I would be making her realise that meanness is not tolerated, accepted, or ignored in your family, and she needs to take it into consideration that people outside of the family might not be so accepting. Or maybe ask her how she thinks her beloved nana (or whoever) might feel if she said the same to her?