I don't know that I'd share this with your sister as it might come off as defensive, but this article by the National Association for the Education of Young Children specifically addresses that "gift of time" arguement:
http://journal.naeyc.org/btj/200309/DelayingKEntry.pdf Both of my dds' preschool teachers told me not to start them in K when we did due to their late summer/fall bds. Dd10's preschool teacher told the parents of every child with a bd in May or later that they should wait a year.
I agree with Grinity that each child differs and what works for one kid may not work for another. That said, people who argue that all kids who would be on the young end need to wait a year are going against the research. It is just making a different group of kids the youngest. Someone will always be the youngest.
