holy hell what kind of shit family did you grow up in? Laughing at another human being is a horrible thing to do, especially in front of them and their loved ones.
How is it your family's business to claim what she "should have done"? She should have abandoned the child? Sorry? So it can grow up abandoned and in isolation instead? Or so whoever else adopted it would be a saint that "shouldn't have adopted such a child"?

She made a choice to keep the child for a reason, and she's genuinely hurt about the struggle he'll have. She's a good person. She's right that your reaction was toxic; and that you decide you don't feel bad just because she made the choice to cut you out is also toxic. You should gain some maturity and acknowledge that you did something bad and she's in her full right to reject contact with you. You should be able to respect it without being vengeful (and now feeling right in your actions.). Your family might be assholes. Naturally assholes will support asshole behavior. It's an extremely toxic notion to talk down and tell someone what they "should have" done with their child. Gross.