I think you were a villain and you deliberately allowed her to make "displays" before you. Seventy percent of communication is through body language and you had already implied to her that you were interested. Had it been any otherwise, you would have informed her sister in such ways as to not disrupt the quiet of the family but yet maintain the integrity of the relation between you and your wife. You, however, chose to enjoy the "scenes" all the while giving her hopes of something. And finally when she asked for it, you did not have the nuts.