My sister and I are now wondering if my parents made a mistake by naming their pricey lawyer as executor of their small estate. Did they?

Your parents are entitled to name as executor anyone they choose.  Are "they" having second thoughts?  It is a bit unusual for people to name their attorney as executor, although there is nothing wrong with doing so.  It is a bit troubling to hear you say that the attorney suggested it.  While I think it is immaterial that you may question your parents' choice, if you feel that your parents are slipping in their judgment, you might do well to mention your concerns to them and, depending on the circumstances, you might wish to make a discrete inquiry in the community about the lawyer's reputation.  Certainly, being in their seventies is not of itself an inference that they are slipping.  Many people are still employed in their seventies and well beyond.