This is unacceptable. Whatever the family's religion may be, Muslims must honour and respect their families. Your wife has no right to do this.
If she has certain concerns, you should address them. There might be something she has seen, like abuse, or intimidation, or trying to brainwash your son, etc... Try to pinpoint what the dispute is about, and deal with it.
But if it is just because she has no respect for your family, this does not give her the right to deprive her son of visiting or being with his grandparents and family.
With prayers for your success.