Just catching up on this thread now and it sounds like at least your daughter is fortunate enough to be in a school with a vital arts department and many opportunities to explore the performing arts, be it in musicals, hip hop, etc. It may seem like it now but high school theatre is not the be all and end all of her career. I went to a NYC public junior high school with a great theatre program (by public school standards at least). I was able to take theatre as my required elective and also participate in the musicals that were rehearsed for after school and performed at the end of the school year. I then went on to my zoned NYC public high school and figured out on the first day that they didn't even HAVE a theatre program. They didn't do plays. They didn't do musicals. There was a choir that became my salvation for 4 years. They did a talent show one year that I got to participate in. That was it. A couple of us tried to form a club and none of the teachers felt equipped to sponsor it. I certainly commiserate with your daughter but it's also an important lesson to impress on her that she is lucky to be in a situation where she has the opportunity to explore the arts in her high school (and exposure to many different arts will only help her if she pursues theatre as a profession) and that she also has the opportunity to learn with other kids who share similar interests. I felt isolated in high school a lot of the time specifically because there wasn't a place for me to congregate with other kids who liked to do musicals (and I am not and never have been a professional by any means, just somebody who likes to participate in the process even in the smallest ways).
She is also learning from an early age how fickle the business is. These kinds of politics go on at the highest levels as well. Look at all of the big movie stars with no musical experience that they cast in big budget musical films just to make money. People are passed over because they're too tall, too short, too tan, too fat, too skinny, a soprano, a belter, because somebody else knows the director, because somebody else has worked with them before, because they have black hair or red hair or an accent or a birth mark, it goes on and on. That is the type of situation your daughter, no matter how talented she is, will run in to over and over again as she continues to pursue her career. It is grossly unfair but if she is meant to do this as her life, it is preparing her for the big time.
By not getting cast, she is also giving a turn to kids who may not have the professional background she has and need this time to learn and grow as performers as well.
Just trying to help her see the positives in this!