I don't see any way that the statement could ever be justified, even with joking.
And I respect that.
The more excruciating a subject, the less likely I am to be remotely inclined to discuss it, particularly with a stranger. (The whole Oprah spill-your-private-pain-in-public thing is still very much not my cup of tea, even though Britain as a whole is increasingly emulating this particular thing.) So, yeah - talking about something terrible, I would totally keep it at a distance with brittle one-liners.
I can definitely imagine the mother-in-law being a harridan, and this being said out of lack of feeling. But that isn't the only way I can imagine it being said - honestly, it struck me as tragic, rather than cruel. But understatement, and that whole way of dealing with intense emotion elliptically, is VERY much part of the tradition in which I've been raised.
I'm not trying to second-guess how the line was delivered or what the emotion was behind it, because, as stated previously, I wasn't there and I don't know the people. But this:
I don't see any way that the statement could ever be justified, even with joking
is where we differ.
It's entirely possible - likely, even, given the fact that evidently you guys can't imagine having this response yourselves - that she's just an insensitive cow. But I know that I could totally have said something like that, if questioned, and if it were something I found painful.
I think perhaps part of that is because we have fundamentally different understandings of what humour is for, and how we use it? Because this:
I may be inappropriately sardonic, sarcastic, and mean sometimes
is absolutely not what I'm talking about. I think that what the mother-in-law said can be read one of two ways: heartless bitch who doesn't give a shit, or grieving person deflecting a nosy stranger from a subject that is simply too painful to deal with.
Because I do not know the people in question, I'm not going to assume the worst.
(Edited for clarity, and because the YMMV at the end, which was meant as a sort of hands-in-the-air-with-apologetic-shrug kind of punctuation, actually read more like sticking my tongue out. Which wasn't so much the effect I'd been aiming for.)