My parents refused to protect me from an adult who was hurting me when I was a child. So, not only did I feel the repercussions of the abuse, but I have struggled my whole life from a sense of being abandoned by my parents.
Don't kid yourself that your father-in-law's behavior is not affecting your children. It doesn't mattter how bad his drinking is or if he admits it or if he can stop. Or even if your husband agrees with you or is willing to do anything about it. What matters is that you know it's not good for your kids to be around your father-in-law.
Protect your children. If you don't, who will?