I am also one of those people that invests emotions, time and energy into gifts. When I don't get the reciprocal response, while my feelings aren't usually hurt, I understand the let down the crappy gift brings.
If after a couple of tries I am not getting the same thoughtfulness in my gift as I put into the gift I give; I either suggest we stop exchanging or blow it off and continue to invest in the giving process but with less emotion, time and energy. A gift card for example as opposed to me crocheting a special blanket.
While I understand that Betty P is investing in the gift and her SIL isn't - at this point it's up to Betty P to decide whether to continue the emotional investment or back off. And IMO neither is a "wrong" choice. If she enjoys the thinking, shopping and wrapping while knowing it's not going to be mutual that isn't wrong of her and if she realizes that and chooses to invest less emotion and buy a less thoughtful present that isn't wrong either.
Me to; half the fun of giving for me is finding the perfect gift! But with one relative, I've learned to scale back and lower my "expectations" I don't care how much you spend on me, I'd much rather have a $10 gift I love, than $100 worth of things I don't and won't or can't use.
However, once I began to do this with her, her giving got a lot better. For a while anyway. Sigh. I've also realized she is more about quantity than say "quality" or finding something that suits the recipient. She will also ask me for ideas, which I will give her, complete with specifics. And she continually ignores them. Sigh. Usually it doesn't bother me, but my last bday, right before Christmas, was a milestone. So I kind of hoped she might get me something a bit more special, but not necessarily expensive.
Nope. I got a bunch of random items from her favorite store, not one which I particularly care for, and an overload of one thing, of which she gave me something similar last year. So I thanked her, and will try and exchange the one she included a gift receipt with, and quite honestly, when some time has passed, I will try and sell them online, along with the other stuff I'm selling.
Sometimes you just can't win for trying.