I have recently gone non-contact with my "FIL" (partner's father). A truly shocking and awful experience. One positive aspect of this is that I never have to see my partner's sister again. We always got along despite having little in common. She used illegal drugs, stole from everyone close to her, and was a habitual liar. All this was done whilst looking down her nose at the rest of us, as she married the man she thought was her meal ticket. The ticket has now crashed and burned big time - bet she's glad I'm not around to gloat!!
Her own parents told me several years ago that they would understand me not wanting to see her. I said I could continue for all our sakes, and I just kept contact to the family events etc. It was manageable because we did find a level on which we could get along. However, I always felt compromised because I would never have continued a relationship with such a person if it hadn't been so as to hold a family unit together.
I never speak about her to my partner, but never stop my children going with him to any family events that involve her and her children. I want them to continue to see their relatives, and they get along ok with her. As so many have said before, it's wonderful to know I never have to see her again. My partner told me that she still wanted to see me despite me not seeing her father. I just blanked the comment, he knew I wouldn't want to.
Try not to worry about your husband's relationship with his brother. If you know in your heart that your decision was valid, you've explained yourself and you're now getting on with your (happier) life, your husband will have to accept it. You haven't upset the family dynamics, your sil has, by behaving so unreasonably. What would he rather have, an unhappy wife snapping at her children and dreading seeing her sil (who you didn't chose to know), or a strong, honest partner who values herself enough to walk away from a toxic relative.
If people say to you (who won't have been in your position) that you should make up, build bridges etc because life is too short, remind them that yes, life is short, which is why you refuse to have somebody in it who causes you this much pain and distress. I would also advise keeping your own counsel about what's happened and why. Discuss it with friends and your family whom you know won't speak to the "other side". Maintain a dignified silence with your dh's family about it, you don't need to justify yourself or fan the flames of further hurt and pain.
Good luck, enjoy your new peace.