To me the biggest problem you face is the lack of support from your husband and his family. Their undermining of your parenting is a HUGE issue and will ensure that your stepson continues escaping the consequences of his actions.
I really hate to sound judgmental or negative, but I can't help but think that the family you are in is more interested in protecting the perpetrator (stepson), as others have commented.
Families can be emotionally sick as well as individuals, and it sounds like your husband's side of the family definitely has an emotional illness. These types of families can be very "clannish", suspicious, and angry when anyone points out their sickness. And the first thing they do is deny, deny, deny.
If it were me I would be out. I am so sorry to say, but it doesn't sound like a situation that is going to improve.
I would not want my daughter's abuse on my conscience. He has already abused her by taking those videos, and only Satan knows what he will escalate to doing next. He may also perp on her friends. This could expose you to legal liability from that child's parents.
