If it's my son, daughter, brother, sister, absolutely I go and support them 100%.
If it's the cousin, niece or nephew, I probably give them a hard time about it, but still go and wear the team gear.
But this is the in-laws niece. Which means we're talking about my wife's sister's husband's brother's daughter. Frankly, my wife has two sisters, both married to great guys that I get along with. But I really don't know much about the families of those husbands. I'm pretty sure one of them has a brother (maybe more?) and the other has a couple siblings (I want to say....2 brothers and a sister maybe). But I wouldn't recognize any of them if I saw them on the street and I don't even know if any of them have kids.
There's a long gap between niece/nephew (yes, I'd do it) and an in-laws' niece.
TL:DR - I agree with everyone here. The in-laws are excited and getting Ute gear. Good for them. OP isn't because he's a bit further removed. The only thing I disagree with are his overly harsh statements at the end.
Maybe --MAYBE-- I would if it was my own child. But if I had a child that was attending that school I would consider myself a miserable failure as a parent.