Your concerns are very valid and well thought out. My heart says take him and give him a chance and then the kids can stay together for sure. You are right, unless they can say for sure he would be a danger to her, she is likely to go with him and both are likely to bounce around in the system since he is so tricky. Or he might be placed if, as they did with you, they may downplay some of the behaviors just to get him in a home. (That happened to me with twin girls I was selected to adopt. I ended up turning the placement down and it was the most painful thing in my life. They both had Reactive Attachment Disorder (RAD) and were starting fires etc. County tried to flatter me saying but with me it would be different, no you dont need counseling and Residential Treatment Center (RTC) covered in teh adoption agreement etc. I refused to adopt because I didn't think it was fair to them to deny them the specialized treatment they likely would need in the future). I dont like the idea of separating them except, in the case of a kiddo with Reactive Attachment Disorder (RAD)????? really may be best.
If you do decide to adopt I would have specific wording in the contract that says if MA doesn't cover any requested therapies or treatment, specialized daycare, camps, specifically including residential treatment and/or residential care that the county will pay for it. See if you can get him on an MA waiver now, as part of the negotiations...it will stick with him as long as he has these disabilities and you fill out the paper work to show it. In addition ask for a monthly stipend in the form of a check for at least 500 dollars. I have that for my son who is very involved. It all goes to his care. My contract for the son I did adopt said they would cover all of the non-MA covered things at 75% and believe me, that helped when I was once able to find a daycare who would try to work with him. He was there one year so it helped. That way if it turns out he is not improving and you need to parent him via Residential Care, you are still parenting him but keeping the familiy safe.
Even with that protection, it could really stress the family and hurt the others for sure. I personally chose not to adopt any more because my son needed so much. I was offered another child to adopt and I turned it down for both of their sakes. It broke my heart.
My mind says, no ....my heart says yes--but be very smart about it. I hope you stay in contact regardless to help you work through issues as his foster mom. ODD is only one part of Reactive Attachment Disorder (RAD) that is super hard to handle. Reactive Attachment Disorder (RAD) can be worked with IF you have specialized care, but that is a huge IF and it takes up so much time that other kids could really suffer. And Reactive Attachment Disorder (RAD) is on a spectrum of sorts like Autism Spectrum Disorders (ASD), not all are animal killers, fire starters etc. But it sounds like this little boy is really broken. Poor little man. He may do better in a one child home, a single parent home or somewhere where he does not have to suffer from divided attention. I would hate for anyone to give up on him yet, given you have seen so much improvement. So would not want to see him go to residential for now...but there may come a day since bonding can stay a life long issue and so some people just do better not having to bond to a parent. With that pressure off, they succeed in other areas. You would have to be God to know the future, but you do know that no matter what happens later, for now and the short future, it is very difficult.
What does your hubby say? Did you already mention that? Just curious, you dont have to tell us.