Okay, Im going to be the voice of dissent here.
I am the oldest, the first grandchild, and the first person in my generation to have any children. Therefore, my daughter is the oldest and the first grandchild as well.
I got all the baby blankets, the cross stitched name in a frame, my name on everything, etc. My mom wrote detailed information in my baby book, kept a pregnancy journal, and saved ev.rey.thing. having to do with my babyhood. I had four younger siblings, and they all had baby books, but they were barely filled out. No homemade baby blankets, and my poor littlest sister didnt even have her pictures made in the hospital like the rest of us did. She's always been a little butthurt about that.
My daughter got all.the.things when she was born.My son got nothing. Like, really, nothing. Pretty much the people in my family were in the "damn, you just had a baby." camp. When the twins were born, they got lots of stuff, but nothing personalized. No handmade stuff. And honestly, no one gives/gave too much of a crap about any of my other kids. DD1 is IT for all of them. She is the favorite, and no one in the family has been really excited about any of my other kids. And if their behavior doesnt change soon, the twins are going to know it- just like all of my younger siblings new that I was the favorite for aunts and grandparents.
DD1 was so hard to deal with that I didnt keep a baby book, a journal, or anything. Im the kind of "fair" mom who bought five of the same baby book (just in case I have two more) so that I wouldnt just cop out and never buy the next kids one. Now, Im having to go back and recreated DD1's information in her baby book so that it will be "fair" because Im keeping super close track of everything the twins are doing.
So, while I think it's a little unreasonable to request that your MIL make a blanket for everyone, I think you should ask her not to sew this baby's name onto it. Then, it's a gift for YOU to use for all of your children. Not something that only the first child gets. My biggest issue is books. Grandparents give DD1 books (classics, the kind that stay around and you pass down to your kids) and they always write her name in them with a note. Well, they dont need to buy that same book for the other kids, cause we already have it. So, when they grow up, I guess DD1 has all the books? Not fair. So, I bought 3 copies of The Lorax and The Giving Tree so that all my kids would have one to take away when they leave my house. Because I'm fair like that ;)