Nobody deserves abuse, not even mean people like her. I know from experience that people like her are not easy to be friends with, but they deserve empathy rather than indifference. She obviously has some unresolved trauma from the past, but that is no reason to let her traumatize you or put up with her verbal abuse. The only people who remember my birthday are people with the same birthday. You say her husband is verbally abusive to her, it sounds to me like she uses you as a punching bag for her frustrations. I must admit I wouldn't want to be friends with anybody like her either, but I think not pointing out her flaws will do her more harm than good in the long run. You should call her out on all her **** without being nasty about it, let her know that you are only offering valid criticism. I would probably even recommend she seeks out help from a mental health professional, talking therapy is often the best medicine for difficult personalities like hers.

Not everybody who acts like that does it consciously, sounds to me like she needs some introspection. I know that's what it took for me to want to recover from my troubled past.