Wow. This really took a weird turn.
I agree with others that even asking about taking some of your stepD’s inheritance (proceeds from sale of home) to share with your children for their college is not only unwise but outrageously immoral.
To attempt to justify it because your StepD has better stats and gets merit aid and has won scholarships from her activities so she doesn’t “need” the money … that is just not a sane argument. She has EARNED those grades and those scholarships from her own work. She shouldn’t have to give up her inheritance from her late mother. And to give it to step-siblings who did not earn merit awards? Preposterous.
You still have a delicate balance to forge here between all of the children. But definitely stop considering the proceeds from the late mother’s home as part of a solution for your kids.
I hope your ex steps up to contribute well and that you can set some expectations for your children that are reasonable … and have NOTHING to do with what their step-sister’s situation is.