In response to the initial question, YANBU to feel upset and hurt that your SIL, someone you love and respect, has used the word "disgust" to describe something that is important to you and an integral part of your heritage and identity. I wondered if some of the upset you are feeling might be because that word and similar terms have been used to describe Jewish people so in itself, the word might feel triggering of a whole lot of other difficult feelings. Your SIL might be completely oblivious to this, having not been brought up in Jewish family or community.
However, YABU to have assumed that your SIL would be okay about being involved in the bris, or okay about circumcision itself. Although not quite the same, there have been times when I have been asked (or rather expected) to engage in an activity, practice or custom that I'm not that happy about. It's felt like I've been put on the spot - do I hide my upset and go with the flow to avoid upsetting others? Or do I decline, stay true to myself, but risk others feeling let down? In situations like that, I find I just wish someone had had a discrete word with me first to see if it was "okay" before rolling along with things.
Your SIL and others are within their rights to not wish their dss to be circumcised and also to feel strongly that it shouldn't be practiced. However, because it is legal and clinical opinions are divided on the issue, you also have a right to choose this for your child.
Something about some of the comments here bugs me though. I was born in the Midwestern USA. When I did a bit of research on this 7 or 8 years ago for work, I discovered that close to 100% of male infants born in that region in the 1960's and 70's were circumcised (which is why the hospital bill is larger for having a boy than a girl.) It does seem that the percentage is declining - in part due to parental choice and in part due to changing demographics - people moving into the area from cultures that don't tend to follow the practice (e.g. Latin American heritage.)
Every male member of my family in America was circumcised at birth, or soon after. As far as I am aware, they are all pretty ordinary, normal guys. My brother and nephews are in relationships, have children, seem to be pretty content. I think most people where I come from aren't even aware that it's not common practice everywhere in the world. My mum was totally shocked when I mentioned my DH and most British men aren't circumcised.
Personally, it's not something I would advocate, but imho, some folks seem to be going over the top, verging on the hysterical, particularly in describing parents who choose to have their boys circumcised as child abusers or likening it to sexual abuse.
And, if it is something folks find so abhorrent, where are the petitions, the demonstrations and the calls to boycott American goods and services, cancelled holidays to Florida, etc., because the practice is so heavily promoted in America? It just seems a bit curious that the ire seems to be reserved for those who circumcise for religious rather than cultural reasons, particularly where that culture is that of the USA.