The family wasn't taking the photos with the idea of doing an album. They took tons of photos, and then decided to make an album, and there weren't any photos of SM to put in it. They could have called her up and scheduled a professional photo shoot when they were doing the album, but that would still be one posed photo taken after all the other photos in the album. They still wouldn't be able to include her a chronicle of the baby's first nine months because those photos didn't exist.
If you don't like having your picture taken, and insist on having photos deleted, then a logical consequence of this will be a lack of photos including you.
In the future, I'd send photo albums to the other grandparents and great grandparents only.
My experience is that grandparents can absolutely love albums like this, and that they make great gifts. If grandparent1 lives nearby and grandparent2 doesn't, it would be insensitive to give them an album full of photos of baby with grandparent1 only, because that rubs in the fact that one set of grandparents gets a lot more time with the baby than the others. But if someone insists on photos of them being deleted, there's not much you can do.