At least he is standing up to her. A lot of guys don't even do that... they just expect their wives to put up with it. He acknowledges it, stands up for you & is even willing to get into shouting matches with his mom over it. That counts for a lot, I think.
Maybe he blows it off because he grew up with her acting that way & knows it's just "how she is" and he's right, she'll never change. I think it's great he can see her behavior for what it is, some sons of toxic MIL refuse to believe their moms are anything but saints.
I'm not sure it's wise to put it into a competition with who he values more. Men value their parents one way & their own families a different way... but you're all family and equally important.
Have you given the MIL the choices 1. Respect me or 2. don't be in my life at all? Maybe if YOU cut ties with her, but don't expect your husband to, that might get her to act differently toward you. However, if you get her son to cut ties with her... then his family will REALLY hate you.
My MIL isn't a bowl of cherries, but I try not to put my husband in the middle of it because his loyalties will be divided. I just ignore most of what she does, defend myself directly to her if I need to and mainly just avoid her as much as possible. I keep in mind that my husband & kid love her and she is good to them if not to me.
Good luck. but be careful. How you handle this will affect your family for the rest of your life.