Wiping the slate clean

I have had a best friend for a very long time. I know her entire family and we have been through so much together. But over the past few years we have both grown apart from each other as friends, and we both know it. She didn't like my girlfriend and a lot of the things that I had done, which I don't blame her for because I was extremely self-destructive and did whatever my girlfriend said to do, but she had her boyfriends and I had my addictions.
A few years ago, she got engaged to a really great guy that she had been with for a long time, and they seemed happy, but a few months go by and she calls me and says " If anyone asks I was with you tonight." And the first thing that I am thinking is," Who would be asking that you would have to lie and say you were with me when you are not". And I found out..... well, you get the picture.
So up to current status, she has been dating a guy while being engaged to another and has been using me for an alibi, even at times when she did not even ASK me to cover for her. I know I've done a lot of wrong in my life but I thought that when you made a commitment like ENGAGEMENT to someone that you should be faithful to them. When I say that I love someone I mean it and I don't f** around on them. Is it just me or is that wrong? So since the beginning I have felt horrible for covering for her when he is a very nice guy and doesn't deserve that. But at the same time, if he finds out that she is cheating on him, she looses her place to stay, ect.) Some call it the gold digger and I get that.
So last night I hang out with her and her "boyfriend" per se and it was a good time, but I wake up this morning and I get a message from her telling me not to say anything on facebook. Really? You are going to just use me for an alibi so that you can have two relationships going on at the same time and you can't let either of them go? I can't do that. And so you know that I have just a little bit of a conscience, I have asked her over the phone and in person that I don't feel comfortable doing this and it's not right, but she threatens our friendship and then we both calm down and she says that she will make a decision and never does.
 
So today I just got fed up with it and have been telling her that I think it's wrong for me to defend a LIE. If she wants to screw around on her fiancee then that's her business, but that is just not right. Can she imagine how horrible that man would feel if he found out? He is faithful and a good man and I can't do that. Plus, the man that she is seeing on the side is a good man too. How could you hurt 2 people like that? Man or a woman, if someone loves and appreciate you, you shouldn't play tetherball with their feelings. I sware, I have done some things that are unspeakably horrible in my own right, but not when I was mentally in the position to stop hurting them.
I know that I am at fault for letting it go as long as it has, and I am not going to tell him, because that is not my place to. He is my friend, but she is my best friend and I don't want to see either of them hurt, but isn't there a line that must be drawn? I would never ask my friend to cover for me while I cheated on my girlfriend.
Maybe I have it all wrong, but I feel great about the decision I have made, and for the first time in my life, I have no remorse on what I decided to do.