It really depends on how your daughter feels about it. She won't feel an age gap between her peers (indeed I have a couple of years on her but it's not noticeable) but she will be somewhat excluded from a part of the social life of university until she turns 18. Clubs are totally out of the question until she turns 18. She might be somewhat limited at pubs too - just yesterday I went to the local spoons with all my flatmates, one of whom is 17, and come 9 o'clock a waiter comes and asks us for our ID and she had to leave - they're not licenced to have under 18s after 9.00PM, apparently. I also feel a bit bad for her because I got an email from the university telling me about her age, to watch my behaviour around her, not provide her alcohol, etc etc etc, which I thought was an extremely mean thing of the university to do.
My flatmate focuses on other parts of the social life of university that she can participate - societies, the gym, so on and so forth. But even that can be a bit limited. I go to a fair bit of societies and it's traditional of several to cap off the session by a trip to the local spoons or the uni bar. I've asked her and she says she doesn't mind too much.
I know I personally wouldn't have liked too much to start uni if I were 17, but I'm not sure it's worth it to sit out an entire year just to start university at 18. It's down to what your daughter would prefer, really.