Do you think this is fair to do as a parent?

Your niece is suffering trying to make her mom happy sounds like to me your niece was happier not playing sports or cheer leading. If one thing I've learned by watching my sister putting my niece in beauty pageants make sure she enjoys it because if she doesn't it is going to ruin the relationship Your niece doesn't need the stress of the competition and that is what is making her sick, I only hope your sister in law doesn't have her on some extreme diet as that may be part of why she is getting sick. Your sister in law needs to let her daughter enjoy her life and have fun without any emotional strain or competition