the anger I feel at MIL for being so passive, and for teaching her son to be so passive, and to be superficial and fake and just really not there emotionally
Here's the thing, this transference doesn't end. The reason MIL is the way she is, is because that's how SHE was raised. Her parents presented the same dysfunction or maybe worse. Why did they do that? Because that's how they were raised, and on back it goes. It gets passed along like eye color and hair color until something breaks the cycle and someone is driven to do some growing up. I have been very angry at my in-laws at times for how badly they screwed up their daughters, and then I talked to them about their own childhoods and they actually did better than their parents did. The point is, MIL is going to be who she is -- you either accept it and deal with her or you don't, and that's up to you.
Why don't you just call or e-mail H and tell him how you really feel? "H, I'm feeling a bit raw right now and I'd prefer to either go to lunch with your mother with the kids without you, or have you go to lunch and I will stay home. Either way is fine with me, you decide." That's honest, it's how you're feeling, and it's what you want. Why not float it out there? I see nothing wrong with that.
My parents don't have much of a relationship with my kids, they are a plane flight away and don't make much effort to get in touch. My sister lives in the same town they do and they don't make much of an effort to connect with her kids either. I don't view it as my responsibility to change that. My W, for whatever reason, seeks to connect them and I'm not sure what drives that.
In any case, you don't *have* to do it. As you point out, the kids won't miss it at ages 12 and 14. MIL and H are fully grown adults who can make their own choices about their relationships. MIL blaming you for monopolizing the kids is asinine as you haven't actively kept them away from her. My mother used to complain that I didn't call her enough. Eventually I said "if you want to talk to me, pick up the phone" Problem solved.
--Accuray
Married 18, Together 20, Now Divorced M: 48, W: 50, D: 18, S: 16, D: 12 Bomb Dropped (EA, D): 7/13/11 Start Reconcile: 8/15/11 Bomb Dropped (EA, D): 5/1/2014 (Divorced) In a New Relationship: 3/2015