Did I do the right thing by ending this 12 year old friendship?

Yeah, you were the wrong one here. Although you did'nt stab her in the back, you were a coward to let go off a friendship, and you still think that what you did was the ultimate sacrifice for friendship. The problem is her parents and not you. She trusted you fully and believed that the foundation of your friendship can overcome all obstacles, but then, you shattered it.