I would give her the items that you can identify as coming from her mother or other close family. And that is it, and I would make it clear that nothing further would be forthcoming. I'd probably even make it clear that we were returning those items only because they were gifts from her mother.
Because this isn't about items, it's about boundaries. She is acting as if she still has ownership of the house and the things in it, and she doesn't. The fact that she demanded clothes that you had bought for your DH's son, to me, shows that she is not respecting your role as DH's wife and DS's stepmother. She's still viewing things that deal with son as her domain, and you have no say. You need to nip it in the bud, now.
Another issue that I see, and maybe I'm overthinking it, but.. your son is going to have a sibling who lives full time with a mother that he rarely gets to see. I think giving sibling your son's baby stuff (if he knows it was his) could make him resentful of her child.