Oh, it wouldn't be cruel, really, if his new owners gave him a lot of attention; but you're right--he'll be happier (and less likely to get in trouble) with a companion. It all depends on if the kitten will be left alone for more than about 4 hours at a time on a regular basis... in a home with a stay at home mom or dad, the kitten would have company; in a single working person's home or a place where everyone is out all day, the kitten will be more lonely.
Lots of people have just one, happy, cat. It's all about the love and attention that one cat gets.
This is your sister, though, right? I mean, if you gave her two kittens, then you could visit them both whenever you visit her... it wouldn't be goodbye forever.
What does your sister think? Does she want two?