I'm not going to reciprocate gifts for my brother and sister-in-law's children
That seems kind of mean? Do you have problems with them?
I think they are good parents to my nieces and nephews
You should send gifts after receiving them. It's rude to accept gifts from others you don't plan on being nice to.
I'm going to teach him a lesson by sending them gifts late.
Well I doubt they might be received as learning a lesson. If you have a problem with them be an adult and tell them what is wrong or why you feel hurt.