Hmmm...thats an interesting situation. I know i'm personally not having a bridal party. But that was both of our choices. And more me not wanting to choose between friends and siblings.
But if you want your sister there i feel there should be some sort of compromise. I can understand a lot of what your FI is saying. It being your day and all, but because its YOUR day...you should be able to run it how you see fit. If he doesn't want to choose a friend, maybe he doesn't have to. Your sister could always walk down the isle solo. Its a tough situation, but i don't feel you're i the wrong at all. Just talk to him, i'm sure you'll work something out that makes both of you happy.
Good luck hun!