Hi
Ultimately, this is your daughter's decision- I'd point out the downsides to her of going to such a small institution maybe once, but if she is very keen to go there, then I wouldn't try to put her off.
If she finds that she isn't happy at the uni, she may be able to transfer to another institution, but if you've already had a battle about her wanting to go there, she may find it harder to admit that she got it wrong.
Of course, it may also be that she has a great experience there and loves it!