I really don't want to be insensitive when discussing the OP, but to be blunt, it does not sound as if they are rolling in cash. They will have had a three year gap between one vacation and the next and their child has been in the hospital several times in a year. I am guessing they had had to budget for this long awaited WDW vacation and have put a lot of thought into it. A trip to Mexico, especially with having to buy 5 passports, is going to be expensive. Very possibly more than WDW.
If they spend all their money going to Mexico, will it be three more years before they can take the vacation their family actually WANTS to take?

My guess is that for this particular family to go to this destination wedding, to a locale they have NO interest in, will eat up all their vacation money for a good while to come.
Not everyone has thousands to spare to go to a place they have no interest in visiting. If some members of my family had to spend $500 to attend a destination wedding, it would be out of the question, let alone $5000. My sister is my best friend and I would not spend $5000 or so to attend her first, second or third wedding.

(Unless it was in Italy....maybe then.) And she wouldn't spend it to attend mine. And we'd both be fine with that.
I do think it was presumptuous of the brother to give her "advance warning" that she needed to start saving money to attend his wedding. I can only hope he chose his words poorly. If my family had not had a vacation in three years, I'd go exactly where I wanted and nowhere else. The brother may be disappointed if she cannot go to Mexico, but her KIDS and husband will be disappointed if they miss WDW. As I said, this is a no brainer for me.