FWIW, my money is on HS bullshit. You should mentally thank your SIL for demonstrating that being raised religious is no guarantee of becoming a good person.
Honestly, the question itself is insulting. There are billions of people on this earth who have grown up without religion of any sort, much less evangelical Christianity. The implicit assumption that they therefore must be inherently immoral, barring some sort of miracle, is narrow-minded, sad, and offensive.
My opinion on this is formed from my conviction that if God didn't exist, we'd have invented Him anyway. In order for humankind to populate the earth and become the dominant species, we needed to learn to work together in larger and larger communities. That requires generally-understood and -followed codes of conduct, empathy, shared sacrifice, doing unto others, and all of that. These rules can be conveyed and enforced by secular rulers or by religious ones, with equal effectiveness. The universality of many concepts across many religions underscores this for me: they are, at heart, the very foundations of our society. The difference today is that religions make it easier to accept a pre-selected series of rules and behaviors, if you are so inclined; if you do not subscribe, you must develop your core principles yourself. Both ways have pros and cons, and neither is a guarantee of success.
FWIW, I was raised atheist, joined the Episcopalian church in HS, faded away over the years, married a Jewish man, and now take our kids to a Reconstructionist synagogue. I like our synagogue because the main tenets are strikingly similar to those I was attracted to as a teen, minus the Jesus bit. I have known both good and bad people, in both religious and unreligious categories. I would currently classify myself as agnostic -- at heart, I don't have the faith the truly religious have, but I wish I did; I don't really believe but would love more than anything to be proven wrong. My vision of God is that, if He exists, He is far, far greater than any human mind can comprehend in full, and so all of the various religions represent individual humans seeing and interpreting their own little sliver of the whole. Which means, by definition, each interpretation is inherently limited and fallible, just like those humans who first envisioned/interpreted them.
With respect to the SIL, as an old fart who has been through the younger know-it-all relations phase, I would advise to simply ignore her and don't engage. I have a SIL, whom I actually like quite a bit, but who sometimes is breathtakingly condescending and unaware of her own presumption. She also feels like the "overlooked" sibling, so I assume these two behaviors are connected -- it is so important for her to be right, to know best, to prove/establish her place in the family. I mean, at one point, she told me I needed to have a second child so my first wouldn't be lonely (guess which one of us decided to stop after one kid?); at another point, she got ridiculously angry at my DH when their mom was in the hospital, because he showed up for a visit on "her" shift. WTF? The problem is, people like that are literally unable to see their own shortsightedness; they are so wrapped up in their view of the universe that they don't have the maturity or perspective to really understand that other people may be different from them, and that that is ok. But, you know, when I get past the insecurity, she is still a decent person, and the family as a whole is awesome.
So why give someone like that the power to control your interactions with her whole family? She's basically having a tantrum. What do you do when kids have tantrums? Do you engage, argue, try to persuade the they are wrong? Of course not! You pat them on the head and say "there, there, let's talk when you've cooled down," and go about your business. Which, of course, only pisses them off further, because you are not giving them the attention and power they crave. My mental image comes from 1-2-3 Magic, where the guy talks about being the horse in the field, enjoying the sunshine, calmly chewing on some grass, while this horsefly buzzes around, poking, poking, trying to get attention, and the horse just periodically swishes his tail and goes on with what he's doing. When you respond to the bullshit she's throwing around, you're giving her the power to control the relationship. OTOH, if you just ignore the taunts and hypocrisy and condescension and metaphorically pat her on the head and go on talking to her and everyone else as if it didn't happen, you take back your power from her. It's hard, because you have to let a lot of wrongheaded and insulting stuff go. But if it got my 4-yr-old in line, it can work with a 22-yr-old know-it-all. :-)