No ... you're not going nuts ... just comes with the territory. It's a normal feeling, so don't sweat it.
Perhaps the "order from the bench" was a smart thing ... your DH and PBFH DO have to work on their issues.
It is a difficult thing to witness the injustices to both DH and your SS, but yer gonna eat yerself alive from the inside out if you don't blow it off.
There's a great book that might help you understand how to have a different perception of the goings on - The Four Agreements by Don Miguel Ruiz. If you haven't read it, you really should. I read, and re-read, and re-re-read the book. You might want to go to amazon.com or barnesandnoble.com to read some reviews to determine if it's your "cup of tea.
I knoew several people besides myself who have read it and been able to deal with the situations far better -- for the good of all.
Good luck, and just remember that you're not crazy -- the situation is, not you.