You brought back some memories for me! You see, I have 4 children, all now grown and married and all have children of their own. They are all active in their own churches, and I thank God that all of them, their spouses and all of my 7 grandchildren (their children!) are Christians.
Thinking back, I began to remember how each one of them, when they were in the same age group as your daughter, began to ask if they could attend another church. Since we knew of the churches, and knew some people who attended at those churches, we untied the apron strings all four times and let them go where they wanted to go.
Their reasons were all about the same...either they liked the youth group better, or they had friends who went to those churches, or they had visited and just liked it better.
I've never regretted this decision. We never had to make our children GO to church. They always liked going. I wanted them to continue to LIKE going. And they did. I really believe its best that they go where they LIKE going, and at that age they LIKE being in groups of their own age.
I've always said that teens are kinda like penguins...they want to talk alike, walk alike, dress alike, act alike...well, you get the idea. I see this desire to go where the youth group offers more for them as part of this 'penguin' mode they are in.
I would let her go where she will continue to LIKE going to church. And, I think going to the other church will help strengthen the union between the two sisters, too. And with her sisters children! Its just going to strengthen the family ties all the way around! And family ties that revolve around 'church' is a wonderful way to keep the family ties connected and strong!
By the way, I assume your husband does not object. I would make sure he is comfortable about it, too. I don't imagine he has objections, but this should be his decision also.
My favorite scripture: Malachi 3:16
"Then they that feared the LORD spake often one to another: and the LORD hearkened, and heard it, and a book of remembrance was written before him for them that feared the LORD, and that thought upon his name!" (Every time we speak of the Lord, or even THINK of him--its written down in a book of remembrance!)