I think you are right. My Mom's dementia hit all at once and it's scary how she couldn't keep track of important items - her checkbook, cell phone, wallet. She was fine until she became rattled/scared over a situation (rightly so) and then her brain was downhill - I'm sure the dementia was a slow, gradual, thing but it's unbelievable how fast it progresses especially under stress.
Probate lawyers hear these 'off the rails' stories all the time and it's very sad. They go thru their assets then their kids are stuck caring for them. He's obviously lost his mind and following her wishes.
I had to contact a lawyer in my dad's state to try to see what we could do to protect him from exhausting his assets (it's unreal what they do for an outsider) but, fortunately, we were able to use the sheriff's dept -- tough going through but you feel better knowing you're trying to protect them. If they live several more yrs. (very possible) they need their money to live on. We think our aged parents still have common sense but some lose it. Wouldn't hurt to get a check done on her if you possibly can. I was dealing with the state of California and the senior services were no help. Told me my father has rights and he could allow anyone he wants to live in his house (duh) and it didn't matter if they were a serial killer - it was his right.
If you're a senior yourself (over 55) maybe consider contacting a lawyer thru senior services and see if they can offer some advice to get information about this wife. I don't think it's that easy to do but it should be to protect these aged parents - anyone for that matter. If my husband has any information I'll PM you - usually, it's talk to a lawyer. A reputable lawyer should be willing to answer some of your questions by telephone.