Well, most likely /bin/sh there is in fact the good ol' bourne shell, which does not support the {$START..$END} bash feature. If you have bash installed there, you could simply change the shebang line from #!/bin/sh to #!/bin/bash and it should work. If not, you'll have to write a more portable code, try:
#!/bin/sh
START=1
END=5
while [ $START -le $END ]
do
echo $START
START=`expr $START + 1`
done