What counts as a dose of realism for one person, can count as a dose of cruelty for another.
In a popular post on the AITA subreddit, a man asked if he was wrong for telling his BIL it's his own fault he wasn't invited to his niece's birthday. He wrote:
My daughter (14) loves her uncle a lot but she is angry at him right now. When we were walking home together one day, we saw an emaciated dog tied to a pole in front of an empty house. The owner must have abandoned her there. My daughter had tears in her eyes. I was already thinking of calling my wife and asking if I can bring the poor dog home before my daughter begged me.
Took a picture, sent it to my wife with a couple of texts and she said yes. When my BIL first saw the dog, he said "He's probably gonna die by the end of the the week. Don't know why you bothered taking him home." She teared up a bit at that. It's been over a month now and he is still alive and recovering well. My daughter still didn't want him at her birthday party though.
She is still upset at him for saying that we should have left her dog there and asked us not to invite him. He hasn’t apologized for his remarks either, insisting that he was ‘only being realistic.’ BIL was really upset, saying that I'm wrong for denying him the opportunity to celebrate with his niece. I asked 'What did you expect?' His wife then said that I was being petty with the comment.
Given the info in your comments that he has refused to apologize and says he was just being realistic - NTA. Your BIL sounds like one of those people who take pride in “being honest,” when really they’re just insensitive, thoughtless, or cynical jerks.
Good for you for supporting your daughter, and your response was exactly right - if he wants to cling to his right to say what he wants, he can learn to live with the natural consequences.
Your daughter may have seen a red flag in her uncle. He sees a sick, abandoned dog and thinks it should be ignored to die alone ie depraved indifference. You and your daughter see the same dog and rush to provide it with TLC whether it lives a day, month or year etc. That's a huge shock to her, seeing that defect in her uncle.
NTA I always allowed my kids to decide who they wanted to spend time with. BIL was insensitive and it's up to him to try to repair the relationship. It's not your place to help him. You're her father, be her sounding board and support her.
NTA, she asked that he not be included. That is very different than you denying him the opportunity. It should be pointed out to him that this was her choice. Nothing petty about pointing out that his words ended up with this result.
Based on the answers you gave in the comments BIL sounds like the type of person that is "Brutally honest" or "Just being realistic" but doesn't like it when someone else is "Just realistic" with him. NTA if he doesn't even apologize your daughter has a right to hold it over his head for as long as she wishes to.
After receiving lots of support, OP added an update.
ETA: Before anyone else says that I'm rashly severing familial relationship, it's not like I left no avenue for reconciliation. My daughter really loves visiting her grandparents, and my BIL lives with them. She is still seeing them once every few weeks so no, I did not burn the bridges. I did not 'go nuclear.' It's just the birthday party.
Clearly OP is NTA, it's his daughter's choice if she wants to be close with her