Not at all! It may even be better to start at an age when she's keen to learn and has the motor skills to manage it. The piano is good because there's none of that making a horrible noise while you get the hang of it.
Please give her the opportunity. It is such a fantastic thing to do for your children. I am eternally grateful for my parents paying for music lessons when I was a child.
I started at high school and now I'm a music teacher - older beginners tend to be more co-ordinated and that, plus strong self-motivation can mean faster progress than for an average 7 year old who is doing piano to please mum.
Oh - and I don't know how the school are managing it, but many schools have peripatetic music teachers who teach small groups or individuals, so being a beginner is no problem at all. I doubt she would be the only one either.
I am bigger and more coordinated for sure than the (little) kids, but take longer to learn some things (too many interuptions, I prefer to think, rather than age related memory loss). Should be ideal at that age for her.
Expect it to be hard at first, but it will improve, tell her. A little every day. is better than hours all at once, once aweek.