Is it permissible for a son to defend his wife and tell his parents that they are mistaken and unjust towards her, especially since her psychological and physical condition has deteriorated due to their actions?

It is legislated for the son to rebuke his parents and defend his wife from injustice that befalls her, doing so with Islamic etiquette. This is not considered disobedience. It is the wife's right to have an independent dwelling, and she is not obliged to live with her husband's family. The husband must provide for her maintenance in a reasonable manner, and his spending on his family does not negate her right. He should help her in honoring his family. The husband should care for his wife, her health, and her treatment, as this is part of living together honorably. Good relations between in-laws are Islamically required, in emulation of the Prophet, peace and blessings be upon him.