Your own family of origin crumbled from the inside out many years before now.
Your dad is not so much hurt but really annoyed that his other daughter has decided understandably to go no contact with him albeit for a while (however she may change her mind further and make that permanent). No contact is precisely that and you can help in that in not telling your sister anything about her dad being so called hurt and such like. He was probably neither caring nor good fun to your sister and at times you as well. That was never a decision anyway taken at all lightly by your sister. She told him some home truths about him. He does not like being told.
Daughters of narcissistic fathers often describe feeling “unsatiated” when it to comes to getting what they needed from their fathers. They never got enough and would have to compete with siblings for time with Dad. As a young child, Dad would comment on how beautiful you were. But as you grew older, he would rarely miss out on commenting on weight and attitude. You probably carry these concerns into adulthood, even if you found success. With a Dad like this, it's never enough. With men (or women), you often feel vulnerable and worried you’ll be dumped for someone else. Anxiously avoiding commitment or taking on the narcissistic role are both natural ways to keep relationships safe; it's understandable and self protective.(But, you lose.)
What you describe here is very typical of people who grow up within such a narcissistic structure. People from dysfunctional families end up playing roles; what role/s did you play and are still playing out here?. Were you the more favoured sibling, who was the golden child and who was the scapegoat (those roles are also interchangeable) when you were children and now as adults?.
I would do some further reading on triangulation within such families as well as narcissistic family structures.
With regards to triangulation this can be defined as an indirect form of communication where one person (usually the narcissist) acts as a messenger between two other people. Or it can be a direct form of communication where one person attempts to draw in an accomplice to gang up against a third party to further their agenda. Be most careful not to get caught up in that particular dynamic.
One of the ways narcissists use triangulation to manipulate their partners into siding with their point of view or acquiesce to their wants and needs is by using third-party reinforcements to substantiate and their opinions. This is form of recruiting allies when taken to the extreme is a form of bullying. The narcissist tries to manipulate anyone who may hold a different opinion or belief by using the help of a usually innocent third party, who of course, has only heard the narcissist’s rendition of the truth.
The third-party is usually oblivious to the narcissist’s ploy and believes they’re only trying to help the narcissist. Usually, the their party is a relative or one of the members of the narcissist’s supporters that the narcissist uses as a tool to help settle differences and coerce their partner or anyone else into accepting their view point through the use of persuasion, embarrassment, majority rules or guilt.
In emotionally healthy relationships, couples do not recruit third parties or use messengers to settle their differences. They have face-to-face discussions. They don’t strong arm the other by using a third person to help influence their partner and do their bidding for them. They respect each other and their relationship and if they cannot come to an agreement, they will seek a qualified, unbiased third-party, such as a therapist , minister or counselor.
I think he has done you a favour actually by cancelling the Christmas visit; it is not possible to have any sort of a relationship with a narcissist in any case and I would certainly stay away from him.
Re your comment:-
"I do I think he needs to seek some therapy and sort himself out".
I smiled wryly to myself when I read that. As for therapy well you can forget that with regards to him, it will not happen. You speaking to a therapist though and one who is highly versed in the ways of such families, could help you no end. He will likely never agree to any such thing because he thinks there is nothing wrong with how he behaves. Narcissists as well do very poorly in therapy even if they do stick with it which they often do not.