my son also dropped off the bed at about 5 months. i learn from it and put more cushion around the bed. lol! yes, he did get hurt, but at least it shows that we need to childproof the area more than what we thought is enough. just treat it as a lesson.
dont't worry about it. your mother-in-law is just over cautious. you did nothing wrong. it's part and parcel of growing up. he is yours so you have the final say. no mother will hurt her own child on purpose!