@dontdointernetbut
I'm so sorry to hear your news.
It must be incredibly hard for both her and you after all the additional work she put in.
In terms of advice (and I'm speaking as someone who was re-directed) I honestly wouldn't look to apply for a third time.
I understand she must be gutted, but as a bright child she will do well and thrive at other Universities and I think that's what she needs to focus on.
From what you've described I'm not sure what a third application could achieve above what's she's done already and the risk of another year out might well negatively impact her other options if she's unsuccessful again (and another Oxford application as she'd have been 2 years outside of an academic environment).
She's always got the option after completing a first degree to apply again to do a Masters or PHD if that is something that might appeal - my Uncle did this (Durham for his BSc and Oxford for a PHD).
In that sense the journey isn't over - she's just looking at getting there by a different route.
As I posted above, my life would have been different if I'd been accepted into Oxbridge but I CS say with certainty that it would not have been better. I've had a fantastic career and blessed with a great family. I wouldn't change anything even if I could and in time I'm sure your DD will come to feel the same way 