There is no mistake. It sucks to not get in, but you can't do anything about it. You did say she did get accepted by some east coast schools, so if those schools have good recognition, maybe she should consider going to one of them. She is the one that is off to college so she should at least get to make the decision and yes, for her to get accepted means somebody else got rejected. But if there was no real intention of consideration to begin with, then applying to those east coast schools was just a waste.
She might be able to apply again to the UCs this November, if she is willing to take a year off from school. OR she can start at community college. But, if she commits to going to community college, she is pretty much there for the next 2 years. UCs have different admission requirements for transfer applicants (this is what she will be once she starts attending community college) and UCs would pretty much require completion of at least 90 UC transferable quarter credits (which is about 60 semester credits) of General Education courses and prerequisite courses for the intended major. It takes about 2 years of full time enrollment to earn that amount. Then she still has to apply for admission again. With California community colleges, UCs typically like the students to follow the IGETC general education pattern at their school, and follow www.assist.org for the articulation agreement between the community college and the UC for courses pertaining to the major.
Right now, she has three options. First option is to pick from those east coast schools, second is to take the community college path, third is to wait and not go to community college and then apply again this November for Fall 2017. Going to the east coast won't be cheap, but she starts the road to earning her degree right away and she doesn't have to apply for transfer admission later on. Community college costs less and she still can take classes that transfer, but she doesn't build a GPA history at the new school. When a student transfers to the UC, the UC GPA is still 0.00 because there is credit history there and its the same at whatever school the student transfers to. Third option is probably the poorest option, since if she didn't get in now, she might not get in even if she waited until then, but she would have wasted a year of doing nothing for her college career.
And what you should do is let her choose what she wants to do. You can voice your opinions and such, but in the end, its her that will be going to college