OP, I'm sorry I haven't had time to read the entire thread, but I've skimmed most of it. I feel desperately sorry for you and DH, and of course you DSD. Personally, I would feel exactly the same as you about this. There seems to a school of thought that if you lean on her too heavily she will never forgive you, and 'always grieve for the baby she never had'.
But there can, and will be other babies - in better times, with a man who loves her and wants to support her. What about grieving for the life she never had, and all the missed opportunities, if she goes ahead with this? Does she have the foggiest idea of how much she is going to handicap just about every aspect of her future, and her child's, by going ahead with this? Of course she doesn't. Some people believe that you 'punish' a baby to abort it. I'm a bit more pragmatic than that - I'm of the opinion that in certain circumstances you can punish a baby by having it.
If this were me I'd be making no secret of how horrified I was with her decision. You can't force her to have a termination, obviously, but if you come across as too understanding and too 'nice' about the whole thing she's going to get carried away with the idea that it's not such a big inconvenience after all - and it flipping well is. You are prefectly entitled to let her know what you love her very much, but you will not let her choices dominate your life. If she wants to be allowed to make 'adult' choices then she must accept adult responsibility. And where parenthood is concerned that means, quite simply, that her needs and feelings do not come first - ever again.
You should make absolutely no bones about how the whole family dynamic will change, and how you and her Dad will be put under pressure financially, and forced to contribute practically and emotionally to something you have absolutely no desire for right now. She has to be made to realise that her decision may be a selfish one. It affects all of you - not just her. If you feel like bawling your eyes out in front of her because this is a disaster for your life, as well as hers - then do it. Don't hide it from her.
I know I sound heartless, and I don't want to make her feel terrible, but I do want her to realise just how monumental a decision this is, for everyone. Ask her what hopes she has for her child's future, and then show her the harsh realities of what she can expect, statistically, to give her child. What makes her think she'll be different?
Make it clear to her that children require sacrifice, and ask her if she is prepared to sacrifice her education, and her social life? It is not your job to assume responsibility for, or make sacrifices for this child, while she plays catch-up with her peers.
If you live somewhere nice, take her to the grottiest part of town and show her what living in the sort of accommodation supplied by the state to a 16 year old with a baby will be like. And make it clear that as soon as she hits 16 that is where she will be. On her own, dealing with her own choices.
I know plenty of people who have had babies as teenagers will be horrified at this, and they will say they don't regret it for a moment and it all worked out in the end - but honestly, what woman could say anything different, and wish away the existence of her own child once it was there? But have they wished they could have given their child more? Had a better life? More money? More fun? Almost always.
You only have to look at the number of people moaning on here about crap accommodation, no-one to share the burdens of parenthood with, no money, blokes who aren't interesting in you if you've already got a child, how hard it is to get a decent career when you sacrificed your education for a baby, the pressure of trying to study when you have a young family, I could go on all day.