YTA

She doesn't mind the friendship and she's not threatened by her friend. But socially she wants the ceremony to be focused on you and hers relationship.

I've been the best man to multiple friends. Not one of them has said it was significant of our special relationship or showcasing how important I am to them and none of them would threaten to stop the wedding if I couldn't be their best man. That would have been fucking creepy as fuck and I would have declined the position. I'm there to support my friend. I'm not there to have our friendship honored in some creepy fucking way.

You want to showcase your special relationship with this important friend at a time where the relationship between you and your wife is supposed to be the focus. You need everybody to share in this special relationship instead of the one with you and your wife. And you think that's normal?

Instead of saying look at the beautiful couple the guests will absolutely be saying, "Hey, what's up with that? Do you think he's fucked her before? Is that an ex? Wow...I can't believe his wife is okay with that. Well, I guess she has low self-esteem. How degrading to have to share your husband with another woman on your wedding day."

People's perception of her matters and basically I can 100% guarantee that she will not be the focus of the wedding. Instead, the focus will be gossip about whether or not you're fucking your best man.

The fact that you don't get how much this will damage how the audience perceives your wife or don't care about it is fucked up. Imagine going to a wife's fancy work event while wearing overalls and no shirt because it's what your comfortable in and you shouldn't have to change just to impress other people. You're basically doing that.

Sure, some people won't care but a significant portion of her family definitely will and it'll be a topic of conversation and impact her social standing.