Every woman of a certain age should take a young lover.
Your wife is right, of course. For a long time, your inability to ever satisfy her sexually had been putting a tremendous strain on your relationship. But now she has another, much more masculine and better hung, man who takes care of her sexual needs on what has become a nightly basis, and you no longer ever have to face your own inadequacy because she has no intention of ever having sex with you again.
The message she is sending you by letting you see them together like this is that he is now the one she loves the most, while you are nothing more than her cuckold and she has no respect for you as a man.