First of all, I think its quite clear that you are NOT in the wrong, and your are NOT being silly.
"There are three sides to a story: My side, your side and the other side." - I believe that. 'We live multi-storied lives". So I guess it would be nice to have more sides to this story, but I'll take yours 
I am not a big fan of family. Not at all. Not even a little. Your sister is being an ass. And a big one at that. Write her off and get her out of your life. If you want to see your parents go and see them when she's not there. Your parents HAVE to start working on getting her out of that house, but the situation is complicated, since she has a child. And I fear for what will become of your niece should she be living alone with your sister, no doubt she will forget to feed, bathe and school the little girl as well. How old is your sister? She is obviously not nearly mature enough to be raising a child. She needs to grow up, and she needs to grow up pretty damn soon.
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Do not confuse altruism with kindness, good will or respect for the rights of others. These are not primaries, but consequences, which, in fact, altruism makes impossible. The irreducible primary of altruism, the basic absolute, is self-sacrifice - which means: self-immolation, self-abnegation, self-denial, self-destruction - which means: the self as a standard of evil, the selfless as a standard of the good.
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