Caring for an elderly, demented family member. Can anyone advise how they should proceed?

My niece's elderly father is suffering from dementia. He is a large man (6' 4", 280 lb) and verbally, sometimes physically, abusive. He no longer recognizes his wife and son who are "caring" for him. He wanders away and has to be led back to his home because he gets lost and can't find his way back. He can't feed or dress himself. He used to be able to take his meds if they were placed in his hand. Now he just stares at them, and they have to place them in his mouth. His wife is somewhat scared of him and sometimes locks herself in the bedroom to avoid him. She broke her foot recently and was in rehab for about a month. Their son (who is working) came over twice a day to make sure his father was fed and medicated. The son would like his parents to move to assisted living. I'd say this is impossible. Am I right? Does assisted living provide enough support for such a disabled man? Don't you think many nursing homes would also decline to accept such a patient? I'd advise them to get a physician to assess his state because I think they are unable to care for him and need to know if there is any hope of improvement. Of course, they are hoping that his decline is temporary and soon things will improve. I'd say this is denial. I'd say the parents are living on his pension/savings/social security, and the son may be making $100,000/year. His stepdaughter (my niece) offered her mother a home, but her father has to get care in a facility. She will not be responsible for her father. What do you all think they should do? Any advice would be appreciated.