But it can almost never be seamless, because of what CorporalClegg and I have already noted twice: we don't speak like that. It will always stand out like a sore thumb.
Key bit was "best job they can."
Leaving the honorifics is even sillier if your contention is it doesn't sound natural because no one is going to speak in English and then switch to Japanese mid-sentence.
Have you ever heard anyone address their sister as "Big Sister?". How on Earth could that ever be made seamless? Better to leave them out altogether.
Yes, I have heard people say "big sister" in real life, especially when making introductions. Albeit it is much more common to hear something like that in storytelling in general. When you tell a story the dialogue is not 100% natural because natural exchanges of words are boring and unfocused. You weave exposition, like people's relation to one another, within dialogue. Sometimes it sounds a little forced, but it relays information. That's what good dialogue does, the more seamless the better.
Why is saying onee-sama better than just writing "big sister"? They mean roughly the same thing, in the former you're just making it sillier by leaving it untranslated. It is still awkward and unnatural when you translate it in your head.
But that's exactly the point: it doesn't help you understand the relationship between characters, because, as I noted, words like "Sir" and "Lady" have very specific meanings and associations, and they're not equivelant to the Japanese honorifics being used.
They're not direct equivalents, no, but they communicate the social status of the characters in relation to one another because of the associations. If a character says "sir" to another character my assumption is the one is of a higher status than the other (depending on the context, of course).
I don't see any problem.
Edit: to illustrate the point, think about the title "Mr". If you were going to translate that into some language that doesn't use such a title how would you go about it? What does "Mr" actually mean? Well, nothing really. Of course, we know what it means, but its meaning is defined by context. It's just an abstract title used in certain situations. If you spoke a language that didn't have an equivelant, the word is meaningless and untranslatable. You can only learn its meaning by learning the contexts in which it's used. If you grab the nearest word to "Mr" in the language you're translating to that you can find, even though it doesn't have the same meaning and isn't used in the same situations, this seems like a good idea? I don't get it.
Situations like that (and everything we've been discussing) are why skilled translators are needed in order to make the relatively same implications that words have in other languages. "Mister" can imply a lot of things depending on the context, whether its social status, politeness levels, or gender. You find the best equivalent because that is your job as a translator.
The quirks of any one language may not have exact translations across the spectrum of languages. We've established this over and over again. As a translator, you deal with it because otherwise you're not doing your job.