How do you decide what's best for a kid?

I have been trying to write this post all day but I would either get sidetracked or just feel overwhelmed with the thought of writing all of this out.......but I feel like I need to. My mind is going a million miles and hour and has been since Sunday.

About 6 months ago my youngest step daughter, J kept saying she wanted to come live with us. Her first reasoning was because she missed school. She was pulled from school because my other step daughter was having problems. Problems=they thought she was smarter than the rest of the kids in her grade, which she kinda is (I've never met a kid who loves to learn like her.... and this is coming from a mom with a kid on honor roll.....but she has zero social skills) anyway school teaches you many more things than book stuff......like listening, manners, respect, friendship, etc. So she went to the principals office 2 times because of her and other kids not getting along or some such nonsense. The Husband and I do not agree with their homeschooling. He was not asked about it, BabyMama did it and told him later. J cried about it and was very upset that she had to leave her friends. She loved school! BabyMama lied to them and told them that they would get to go back and play with their friends. That never happened, like you can just do that but it sounded good to the girls.

Let me give you the dynamics of BabyMama's house:
J (the youngest who wants to live with us)
older step daughter
then BabyMama and Poppy (what they call their step dad) have 2 kids, age 3 and 1.
Poppy has a daughter that is 16 (her mom died in a car wreck a few years ago so she was forced to live with them)

Obviously with all these kids they need alot of room, so they built an addition on to their house to make their 3 bedroom home into a 5 bedroom. Except it didn't really give them anymore bedrooms because 1 is Poppy's office and 1 is the home-school room. Why Poppy's office and the homeschool room cant be the same room we don't know. He is a youth pastor so its not like he needs tons of space. This leaves the adults sharing a room, Poppy's daughter having her own room and 4 kids in 1 room. J has to share a bed with the 3 year old......this kid is hell on wheels! J says she never gets to sleep and she always has circles under her eyes. So the 1yr old is in her crib, those 2 share a bed and our oldest SD is on the top bunk. J voiced this to us as reason 2 and that's what started the whole talk. The Husband told BabyMama what J had told us and that she said she wanted to live with us so she could have her own bed. Here we have 4 bedrooms.....ours, M, guest room, and the 2 SD's have bunkbeds in their room. So BabyMama said she would work on getting them another bed. and that was that.............

until last weekend! the girls were here and J was INSISTENT that she was not going home, she lived here now, etc. She told everyone this. If you talked about something in the future she said well I will be living here then. M called me mommy and J said 'and you will be my new mom too because I live here'. We were not encouraging her but at the same time we don't want to tell her she cant live here. She is more than welcome here......sadly I love her as if she was my own while my other SD is more difficult and the bond is just not there. Dont worry I fake it for her! M and J are inseparable the whole time the girls are here. They play so good together and J just idolizes M. The look in her eyes when she looks at M shows me what sister love is all about. (I don't have a sister) She will tell you that M is her favorite sister.

Another of her reasons is because she has nightmares all the time at her mom's and never here. She has actually told both of us about this at different times and we didnt put it together until we were talking Sunday night.

The Husband asked J if she wanted to talk to her mommy about this and she said yes. He asked her what she thought BabyMama would say and she said she thinks it would be ok. J said she would miss her grandma but she would get to see her and BabyMama on weekends just like she does daddy. I swear she figured all this out herself! We were just in shock. So we go to drop them off and The Husband was just going to mention that they need to talk soon. When he said this J said yeah mommy, I want to live with daddy and she was sooo excited. The other SD speaks up and tells all about J saying she wasnt coming home etc. M and I were sitting in the car, we didnt expect this to happen. So Poppy gathers the kids into the van so the parents can talk freely since its already started. BabyMama is almost in tears hearing that her child doesnt want to live with her. The Husband told her everything and she said she thought it was just the bed issue and that part of their Christmas gift is going to be a triple bunkbed. (yikes) He tells her its more than that and names all of the things J has told us. I wont get into everything........our life is night and day from their life. We are fairly mainstream while they are very much like the Duggars. They don't have cable, tell the kids how they have no money, very-very hypocritical religious people, and live a VERY simple life. I am not saying there is anything wrong with their life but its just not ours. We like nice stuff and we like to do fun stuff!
This was all Sunday at 12:30.
Sunday at 4:42 BabyMama posted on FB----is sad...meloncholy...heartsick...blue...depressed...glum...troubled...distressed...at a loss...
monday-J called The Husband while he was at work so he asked her could he call her later. She asked her mom and was told yes. J told The Husband that she got to spend time with mommy this morning doing crafts.
The Husband called her back around 4pm and there was no answer. J called back a minute later and said she couldn't talk because they were going swimming in the indoor pool. Now as you saw I am FB friends with BabyMama and I know that she posts how they never actually go to the YMCA and their membership was a waste etc. It sounds like they are kissing up to her, which I guess is ok but we aren't going to change how we do things....its not a competition. We know that will get old and wont last.
I feel so helpless. We don't want to take a child away from her mother. We only want whats best for her but how do you decide what is best? She loves being girlie and I let her wear makeup in the house as long as we aren't going anywhere.......her mom will not let her do this. We feel like she is being stifled at her house......she cant be her. No one asked how she felt about going to school.
Ok now I am rambling and this is long enough. I don't think this will turn into a full custody dispute because its very important for The Husband that they get along.......but he wants whats best for her and her future........not the adults, just her.
It was last left at J would spend more time at our house without her other sister so that she could get a feel for being away from them. This isn't going to portray our real life though. We have school, sports, daycare.
There is just so much and its all I can think about, yet there is nothing I can do.