Sorry to hear your having so much trouble, I don't think adopting her would be the answer. I don't think your daughter would even give her up I know I wouldn't. She just needs a reality check. You need to put your foot down. If you weren't there she'd take care of Jenna right? I mean she wouldn't neglect her. So you HAVE to step back so she gets the hint. I know it may sound hard to do, but you have to say NO to everything she asks you to do for Jenna that is more motherly then granmotherly. You need to tell her Jenna is not my daughter I raised my children already, now its your turn. If Jenna crys in the night fight the urge to go get her and if your daughter doesn't get up take Jenna and take her into your daughters room and wake her up and say your babys up, here you go. Same with feeding, changing, bathing etc.
Ex. Oh heres your baby shes hungry. I know it will be really hard for you, but if you don't set ground rules now who knows what will come next. I don't mean to completly not help your daughter either, but make it known that Jenna isn't your responsibility. If shes really stuck and needs help you can step in, but just put some boundries up grandma ones. Your are the Grandma the best part of being a grandma is spoiling the child then being able to give the baby back to his/her parents. Sorry I blabbered so much I'm not a grandmother or mother, but I hope I helped anyways LOL. Good luck!