I think what I personally would do, is to make the handmade gift for Son's baby. Maybe I would use up fabric scraps (while still having it look nice) rather than buying all new material, but I would make it generally equivalent to the gifts I gave the Daughters for their first-born children. I would be doing this to satisfy my own sense of fairness and peace of mind, so the wife would have no rational reason to feel snubbed.
After that, I would pull away from Son and his wife, but try to pull closer to the Daughters and their families. Then I could still give/make them gifts, without doing the same for Son, with the natural reason that I'm closer to them. (I would make sure to give Daughters the gifts privately, like at lunch between the two of us, rather than at a larger celebration including Son.) Or, if you want to drop Daughters, too, you can pull away from the whole group evenly, without having unbalanced anything as you left.
That's just what *I* would do, I think. I would even everything out for this occasion, and then I would consciously make a reason why things weren't going to be even in the future--because I've become obviously closer to Daughters (or, I am equally not-close to anyone, so no one gets gifts anymore).