You’re not being a dick, op. Many people on here are. You’re understandably hurt and upset that your DH’s family don’t see your eldest daughter as a member of their family. Would those posters saying that DH decided to accept her as his daughter but doesn’t get to make that decision for his family say the same about an adopted child? I doubt they would, because it’s horrible.
I think part of it is that your DH’s attitude is different than what you expected. He doesn’t have a problem with his family’s actions, he didn’t see the issue with asking dd2 to be flower girl and not the eldest, and that is a hurtful shock.
You are absolutely not being a dick. Some people on here will just take an opportunity to be utter arses and kick someone when they’re down.
I think in your shoes now, I would go to the wedding. I would message the SIL and tell her that you are hurt because you didn’t realise that they didn’t see your eldest as family, or as different from the other grandchildren, and that you’re hurt by the photo, but thank her for extending an invitation to your eldest and graciously accept. Then you and your DH have some resolving to do I guess, which will only happen over time and between the two of you.
Just FYI, even though you have tried to blank out names in your screen shots, the names are still visible to me so you might want to co wider deleting, especially in case this gets picked up by scummy media outlets and causes ww3 in your family.