Am I over-reacting or do you think that was completely wrong of my father in law?

Since when does the opinion of idiots matter? Only a masochist would put herself in a location where she is not liked or respected. From now on tell your husband that if he wants to see his family, fine, but you won't go there and be belittled by his d**k head father. Then stick to it. If you get the apology, make snowballs with the snow you collect in hell, and resume accompanying him to their house. Then be cool and aloof and don't tolerate any crap. Have some self respect and demand that your husband not only understand your refusal to tolerate his father's bull, but that he defend you and your stature with his family - or he'll lose you. Remind him that his father cannot replace you and what you do for your husband.