I think it's a cool naming tradition. I'm a genealogist and using the mother's (or grandmother's) surname as a middle name used to be extremely common- kind of fell out of fashion by the 20th century for whatever reason.

I think you still have time to change your daughter's middle name without it affecting her much at all. She's 4 and a half... she won't remember a change to her middle name. The two middle names thing seems like the best compromise- millions of people who two middle names and navigate through life just fine.

Sounds like your family is the biggest hurdle to overcome. You and your wife need to settle on a solution and present a united front to the family- say you know they were really fond of her name but after having your son, you realized how much you'd like them both to have your wife's name carry on with them. They may be disappointed, but it's not their child, not their decision.