I agree that from the outset there should have been different pricing levels dependent of the desirability of different rooms. But it doesn't paint OP's DD in the best of lights that she only wants to suggest that now it is she that has the least desirable room - she wasn't suggesting that when she thought somebody else had drawn the short straw and she'd lucked out at no extra cost!
I have a lot of sympathy of OP's DD - it's a shit situation for her and is going to make things uncomfortable in the house, however it is resolved.
However, I also have a lot of sympathy for the student who the rest of the household was prepared to screw over and dump in the worst room at full cost.
It's a bit shit all round to be honest. The best bet really is to move forward from it as quickly as possible so that there's not tension all year.
OP, can you focus with your DD on what could be done to make the shit room better? As a parent, I'd probably throw a bit of money at it and go out on a shopping trip for little luxuries that will make her love her new room - fancy bedding, a cosy rug, some nice lighting, maybe a bean bag or an easy chair, some blankets, cushions, fairy lights etc, and maybe a nice treat like a velvetiser or something like that to make her room into the cosiest, snuggest one. Best revenge really, to turn that worst room into the best one!