I met MCA yesterday and I asked him about Your Sister's Def.
Apparently the song is a demo made by a friend of Original Concept's Dr.Dre. So This guy Anthony Davis wrote a song for the Beastie Boys, he recorded these lyrics a cappella and he submitted the tape to them. As you can hear the words are supposed to be told from the point of view of a group member. But they think it was funnier to keep the demo as it was and to press it on was.
And here we are, 17 years later discussing this on the internet.