So I think there are three things going on right now that's contributing to the problem.
1) Your wife has low self esteem. She has a hard time thinking that people are going to like her. So much so that she decides they won't and finds things to agree with that. You could be missing out on some things your family is doing, but my guess is it's mostly in her head.
I have (Avoidant Personality Disorder)[http://en.wikipedia.org/wiki/Avoidant_personality_disorder]. I often feel like everyone hates me - or will hate me once they realize what a big giant loser I am. Therapy was necessary for me to be able to function like an adult. I'm not saying she has it, but this need to be correct about being disliked should be worked through with someone who can help her. You can say a thousand nice things to her but if she dislikes herself that much she needs therapy or medication.
2) Your family should have told your SIL to knock it off and that they won't hear any gossip. Your wife already was afraid that people don't like her. Now she knows that your family was having discussions (however one sided) with SIL about how horrible your wife is.
My question about this is - did anyone stand up for your wife? Or did everyone let it continue and allow SIL to keep flapping her lips? If I knew that people let someone run their mouth about me every time they saw that person I would assume that they didn't like me either. I know your parents don't want to "get into it" but they allowed themselves to get into it when they engaged in conversation about your wife.
If you found out your wife's sibling's spouse had issue with you and that your mother and father in law sat around with them allowing you to be trash talked - would you perhaps take issue with it?
3) Your wife is too far away now to defend herself. Her last physical interaction with everyone included a big dramatic blow up. She's embarrassed. She probably feels like if people didn't like her before she must assume they do now. And she can do little to nothing to fix it. Instead your SIL is sitting there still yapping about your wife and everyone is there still allowing it to continue.
Your wife feels vulnerable because she is. It's a vulnerable place to be in to know you're being critiqued by someone who has it out for you to people who are really important to you.
I don't know what you can do to help your wife. All I know is that therapy really helped me. And I was waaaaaaaaaaaaaaaay worse off than she was a few years ago. I know some people scoff anytime therapy is mentioned in this sub but I really honestly think it's appropriate in this situation. Not necessarily couples - just individual for her. She's too wound up to bring herself back to reality. She's too far away to get reassurance from your family. And as far as she's concerned you have one foot in the enemy camp (by being related to them). A therapist can help her work through it better than either of you are able to.