Highly unlikely as my area is somewhat niche but anyway
People have the right to make that judgement, having that right does not mean that people won't view them negatively for it.
If my parents had refused to take in a cousin because it may have disrupted my life, or it meant that I would have had to share a bedroom or have fewer holidays or whatever, and it had ended up with that cousin going into care, I would think very badly of them. Maybe not at the time, but certainly after I had children of my own.
It used to be acknowledged that it takes a village to raise a child, but society lost that view a long time ago. My nan was raised by her aunt after she was born out of wedlock and her mother couldn't care for her as an unmarried girl who worked in service - and thank goodness she did, rather than condemning her sister and niece to the workhouse or a life on the streets!
Adults should be responsible for themselves. For example, I will not provide care to my parents when they are elderly beyond the basics of helping look after finances, doing a bit of shopping etc.
If they need personal care daily care, it will need to come from carers or they will go into a retirement home. Similarly I have made it clear to my children that I would never expect them to do that for me under any circumstances. It is my job to raise them to independence, it is not and never will be their jobs to provide me with personal care.
But society does have a responsibility to children which means that sometimes inconvenience needs to be accepted and dealt with. If I had to take on my nieces and nephews would it inconvenience my children - yes. They would likely have to share a room and unless there was a robust financial provision in place, they would likely have to give up some of the things they have been used to. But they would understand that, as I have raised them to not be selfish!
You are correct, based purely on what we know from the OP, the sisters house probably isn't the best place for the niece to be which again is why I advised the OP to just focus on being there for her niece and to provide her with a home if it was feasible. But that doesn't mean people can't have an opinion of the sisters behaviour as the OP describes it!