How old is your son/daughter and law? You just had a baby, too? Sounds like a HUGE age difference, unless I am misreading something. Please clarify
To answer your question, daughter in law sounds like an ungrateful person. Son seems petty/dumb to bring it up to you---how could he possibly think that mentioning her dissatisfaction with the gift would endear her towards you, and pave the way to a healthy relationship?
FWIW, I think your gift was thoughtful and well-thought out.
Please ignore the rude comments from them as best you can, and move on.