I don't think it's ever wrong to try to defend a child in the face of addiction. And realistically, you know A LOT about addiction from all sides of the fence & can provide a fairly unbiased opinion.
You may be able to really provide her sister with some insight & tools that can make a big difference in how this plays out for the entire family. In that way it's not much different than helping out a fellow Al-Anon member, right?
But I agree that you want to be able to keep a reasonable distance from the drama.