I think the situation could have been handled differently and better i.e. speaking to you first and not asking right in front of your older daughter. But ultimately I'm usually on the side of not really seeing the big issue with a step parents wider family not being close to step children.
I have a step father, I think I've met his mum about twice in 15 years he's been in my life. I do not care. Same with his siblings, one of them I see more than others but they don't feel like my family and I'd not bat an eye if I weren't invited to their wedding. I love my step dad though, he's fab and has always treated me well (had a dad of my own so didn't need another) and is a great grandad to my DC now.
Likewise I also have step children who have next to no relationship with my wider family. They see my mum and dad sometimes but anything beyond that is basically none existent, for example they may get a token gift at Christmas like a selection box from my aunts and uncles but they'd probably not even automatically remember to invite them if planning a party or wedding. They are however, close to our joint DC. DH doesn't care, I don't care and my stepkids have never seemed to care.
I think divorcing your husband over this is crazy personally and if my husband threatened divorce unless his older kids were treated the same as our joint ones by my wider family he could go to be honest. I'd think he had a cheek expecting it.
I suppose it all depends on each individual family 🤷♀️
I also wouldn't allow my youngest to miss out on the experience. By all means do something nice with your eldest on the day and I understand you not going but your youngest should be allowed to go if she wants to and be a flower girl and the comments about refusing to even talk about the wedding or telling your husband to talk to youngest about it in private are just stupid. Would your eldest have to discuss something she was excited about in private with you to not upset your youngest? I doubt it. Your youngest is entitled to feel excited about being a flower girl and want to discuss a dress or whatever with her mum. She should not be told she must do this in private because you're "having nothing to do with it".
The whole situation could have and should have been handled differently by BIL and SIL but ultimately I think this is a massive drama over something that isn't that big of a deal.