It depends On your daughter, obviously but yes I would tend to think you are making it a bit difficult. Do you think it could be because it is MIL and not you own mother?
I have been leaving my kids with my parents for a few nights in a row since they were 6 months old. Maybe twice a year as I had to travel for work or went on WE trips with my DH. They are 2 and 4 now. I cannot imagine having an issue leaving a 5 year old. Maybe she will ask for you in the evening but that is ok, she will overcome it and have a blast with grandma.
I really think it gives a chance to grandparents to bond in a way they can't when parents (especially moms) are around. Grandmas are not like grandpas, they don't play as much, they need time taking care of children the way moms do (with cuddle time, bedtime stories etc..), not only running after them in the park.
We have the same dynamic in my family, one of my 2 SIL won't leave her kids overnight. Makes my mom sad and she doesn't relate to them as much as her other grandkids.
Not saying all that to guiltrip you

you have to trust your gut in the end. But remember, on this one it is more about you and how willing you are to be without your DD so that grandma can be with her than "5 year old is too young for a sleepover"