I think there is no harm in tactfully telling your wife that this is becoming untenable. She clearly does feel it too, even though she may be reluctant to admit to it.
She is not the first who ever ended up trying to take care of an elderly parent with declining health and found it impossible, or at least way, way, way harder than she could ever have imagined. It happened to us when my Dad was very ill at the start of last year, and I barely lasted four days. It was hell on earth even though my parents already had carers. The care company involved the adult social services crisis team.
Could you suggest that an assessment be done for your MIL's needs by adult social services? They might have a crisis team in your area you could call.
Perhaps one step at a time. Could carers coming into your home daily be an option for now? My mother has very limited mobility and has carers coming to her at home three times a day. Firstly at 7am to help her get up and to get breakfast done, then at midday to do lunch and then again around 5.30pm to do her tea. She does have to self-fund though, and it isn't cheap, but it is an absolute lifeline for her, for me and for my sister.
Depending on MIL's means, she may be entitled to some basic care before she needs to start paying.
Beyond that, she will need residential care.
So, involve adult social services, and maybe also a good, independent financial adviser.