I am speaking from the step child perspective, and whereas as a father, you consider yourself one in terms of husband and dad, as a SC, you see your father totally different to the man who is married to someone.
So his attitude is, if she can't accept me as a married man that I am and who therefore come as a package with his wife, then she is not getting the dad.
I think this is very wrong. He does have two separate relationship and role and he needs to recognise this. She doesn't have to accept his married status to accept him as her dad. Really, it is him losing out from not recognising this. He really isn't doing what is right for everyone, he is standard stubbornly on a principle that he think is right which is doing nothing else but ruined the little chance he has left to have a relationship with his daughter.
By not attending her graduation, he has given very strong vibes that he is punish her for her stands. It has nothing to do with you and the fact that you don't deserve her attitude. That's clear between the two of you and that's what matters. However, perfect or not, she is still his daughter and should take her as she is, even if it means still having an issue with the past.
Using my situation as an example, I started to make peace with my SM when I became a mum. It was very simple, when my DD was born, I decided that she would come into the family considering my SM as her grandmother since she was married with my dad and had no reason to consider her differently just because of my own experience. When my SM realised that this was position, she was extremely touched. That with changes that took place in her life, she realised that she had treated me quite unfairly when I was a kid (mainly treated me like a kid who would amount to nothing as an adult when time showed that I actually did very well as an adult despite difficulties). Thankfully, I am the type of person who never forgets but who can move on, so I put behind my before feelings and focused on the present and this way managed to build a new relationship with her.
If my dad however had refused to have anything with me without her before I was 28 and pregnant, I am pretty sure that they would never have been invited to meet their grand daughter and we would probably still be in non speaking terms 16 years later.