My step-MIL (SMIL) has developed a habit of asking if wayward friends of hers (those going through divorces, visiting from out of town, etc.) if can attend family holiday get-togethers, such as Thanksgiving and Christmas. This is a very sensitive area for DH and his brother, given that SMIL entered the family courtesy of an affair with my FIL and has made it clear that she considers all of us a few tiers below "her" family (her siblings, sons, etc.). DH and his brother are very sensitive to her trying to hijack traditional family get-togethers.
Anyway, recently I had some women over for a jewelry party and SMIL asked me -- in front of her friend Joan -- if Joan could come to a large family Xmas party, which DH and I are hosting. This party has up to 20 relatives who see each other, at most, once a year. None of them know Joan. I told SMIL that I'd have to check with DH but that my gut was that it wasn't a good idea. Joan completely understood (and in fact recognized the uncomfortable situation SMIL had put me in) but SMIL got a bit crass and pissy. I told DH what happened the next day and his response was, "As soon as Joan starts sleeping with someone from our family, she's welcome at family holiday parties."
An important note -- several Xmases ago, DH and brother went head to head with SMIL about this type of behavior -- inviting nonfamily to family holiday gatherings. It resulted in a huge fight and she tried to "cancel" Xmas.
So here's my question: How do I let SMIL know that her behavior is inappropriate? That these are important family traditions that the majority of those involved want to remain as they are?