I *totally* understand, but I do think you're going about it in what can be perceived as a rather harsh manner, and I disagree that you have to resort to being mean to get the point across.
My mom is/was the same way as yours except she has a problem when it comes to shopping, period. This grandchild became a huge excuse for her to go completely batshit nuts with buying clothing and so I can sympathize with your frustration, but I think you can get what you need/want and not hurt your mom's feelings at the same time.
Here's what I did (after getting some good advice when I was in the same boat a while back):
I told her I couldn't handle the added burden of laundry for one. I was too far along and too tired to wash more clothes the baby would likely only wear once. It was too much work for me (I spent days doing first time wash laundry -- the closet is packed up to 24 months and the dresser is full. Believe me when I say I understand you feeling overwhelmed.) I told her that if it's this bad now I can't imagine the added burden after the baby comes. She said she'd come help me do laundry. I printed up laundering instructions and they are mounted to the wall above the washer. I'm totally taking her up on her offer. But that's a response to the already huge amount of clothes she'd bought. I needed a preventative for more!
So then I said that any ADDITIONAL clothing items she wished to purchase while the child's an infant were to remain at HER house. FOREVER. That way she can buy what she wants but she has to agree to wash them a certain way with a certain detergent, and then the clothes have to remain at her house. Period. She can show them to me when I am over there but she can't bring them to me, nor can she send the baby back to our house wearing any of them.
I also printed out a copy of our registry and told her she wasn't allowed to buy anything else for us unless it was from the registry. That it was truly precious of her to want to do so much for her grandchild but I pointed out (because she didn't realize it) that while it gave her great joy, it was distressing me and causing more work for me in the process and that was unfair and ultimately not healthy for her daughter nor her grandchild.
So I second the suggestion that you talk to her instead of emailing if you haven't already. Your email sounded pretty harsh and it would totally crush my mom if I sent her something like that. You can be firm without being mean. I don't mean to downplay nor dismiss your frustration -- believe me, I spent time crying over this with my mom, but in the end the It stays at your house!
rule seemed to satisfy her.
Try that. Oh and stop returning the stuff to the stores too, btw. Give it back to HER for her to return or find a new home for (that's what I did). You don't need the hassle of returning nor donating. There are bound to be other babes in the world she's aware of who could use the goodies. But the Your House
rule is a great idea and since we established it, it's worked.
Sorry you're so frustrated -- I'm not trying to make you feel worse -- just don't want you to muck up a relationship with your mom over material goods is all. It's not worth it. Trust me, I know.
Hope that helps. Good luck and you're not alone.