I've only read a few of the responses and so far this view point has not come up.
I have two large, framed, lovely family pictures. One from about 1995 and one from about 5-6 years ago. Neither one are on my wall, they are both put away. It hurts to look at them because they both contain my ex-daughters-in-law. It bothers DS to see them as well so for both reasons I removed them from my walls. I was very, very hurt when DS split up with his first wife. We were very close to her. The second wife I did not get as close to because I couldn't bear getting hurt again if that relationship didn't work out, which after a few years they did split up.
So, I can understand your MIL wanting family photos with just the immediate family. If marriages end up breaking up she might not want those photos on her wall any longer, but if it's just her own children/grandchildren she could still keep them up. They will always be her children and grandchildren, no divorce will change that, so those photos would never be outdated.
I do wish we had a family photo on our wall with just myself, DH and our children and grandchildren.
Can't you do both? Family pictures that include everyone, and then some with just her immediate family? Wouldn't everyone be happy that way? I wish I would have thought to do that the last time we had photos taken.