How frustrating! I'm not sure what to tell you man. Maybe you should talk to your parents, surely they are seeing this too. It's their daughter and granddaughter being hurt here. I'm not saying to hold an intervention, but your sister needs to be flat out told that her husband is a jerkface and she needs to do something about it. I would say to suggest threatening him to kick them out if he doesn't shape up, but it seems like that would only exacerbate the problem. If he does this living in your parents' house with them and you around, he'll be even worse if they were living on their own, especially if he's too lazy to get a job.

I encourage you to talk to your parents about it though.