Sadly, people have apparently NOT stopped making this. The website allrecipes says that 50 people have admitted to making the Orange Gelatin Salad as recently as last Thanksgiving.
tornatore on flickr cc
It calls for cottage cheese, “whipped topping” and canned fruits, almost certainly canned in syrup. To complete the circle of sweet hell, orange-flavored Jello is incorporated. It really does sound like your sister’s most creamsicle-flavored nightmare.
I think the real question is why did people EVER do jiggly salads? I suspect that care-free housewives of the 1950s were bullied into considering glopping a bunch of canned and processed food to congeal into novel shapes (like dead fish!!). It must have seemed very future to them.
Now the only excuse for such a thing is sentimentality or a need for brain salad for your zombie party.
Better commentary on such things (with great vintage photos) can be found on one of my all-time favorite websites: Lileks.