At what point is it necessary to cut ties with your family?

We have in-law problems. As a kid, my husband and siblings were emotionally and physically abused by their father, and by their mother, who allowed the abuse to occur. As adults, of course, the abuse stopped (well, the phsyical abuse), and yet the manipulation did not. MIL plays the victim. Everyone rushes to her defense.... and we (my husband and I) are the supposed perpetrators. We hurt her feelings. I, as daughter in law, do not call enough. I do not say the right things. I don't send the right cards. When we go see her, we don't stay long enough. She pulls every trick in the book to get us to stay longer. And yet they never come to visit us (we live in a different state). When our first child was born, I suggested they come the week after I got home from the hospital to give us a chance to settle in. My parents came to visit right away at the hospital (again, we live in a different state and only had room for one set of parents at a time). Since I was the one giving birth, I wanted MY MOM there to help me out in those first few days. Well, this made MIL angry. She played the victim, and instead of simply sucking it up and coming a week after baby was born, SHE DIDN'T COME AT ALL. With second child, same story. In fact, in the 5 years we have lived in this state, they visited twice. We see them only when we visit (around once a month). And yet this is all OUR FAULT. Husbands siblings are always picking fights. They post horrible things about me on facebook (calling me every name in the book). FIL randomly scolds my husband on facebook (which my husband uses for work purposes) and tries to make him look bad. They blame everything on ME and try to guilt my husband into turning against me. Finally, after one especially bad verbal AND physical argument my husband had with his sister's one holiday, I'd had enough. This was in front of our CHILDREN. I said--- NO MORE. We are through. Problems kept escalating to this point. Nothing ever resolved itself. I was always willing to at least be CIVIL, but they never were. They wanted to be in control of everything. They wanted to use guilt manipulation to get my husband and I to do their bidding. Nothing would make them happier than if we were to divorce. I feel like for family preservation purposes, we had to cut them off! Yet I know my husband loves his parents, flaws and all. And I respect that, and I appreciate that he is a kind enough person to be able to feel that way. But I can't have them in our lives and I can't have them in our children's lives, and he agrees. But I worry one day, when his parents die or fall ill, he will secretly blame be for his estrangement. As it is, his siblings would never even allow him to come to his parents' funerals-- I assure you. They would probably phsyically attack him. The siblings are all hangers-on, dependent on his parents for everything. None of them have spouses. My husband is the only one who was able to get away from this family and live an independent, successful life of his own. What I need is confirmation that this is OK. That when things are this bad, it is OK to cut sick people out of your lives. What do you think?