LW's daughter and future SIL certainly are not wrong to exclude Gail from the wedding. But that's not the relevant question. The right question is: by choosing not to invite Gail, are they improving their situation or making it worse? They need to decide on their strategy for handling Gail, and the wedding invitation should be considered as part of that strategy.

They can decide to cut Gail off or substantially reduce Gail's role in their lives. After more than a year of trying to make things work, that sure would be my choice. Taking this approach, excluding Gail from the wedding is the right call. However, if they plan to try to somehow work things out with Gail, to continue including her in "daily household activities, including holidays and birthdays," then excluding Gail from the wedding will probably make life more difficult, and they need to think hard about whether it's worth it.