I agree. Do let her wear the dress she likes. It may well be admired by girls her own age, and it is them that matter!
I suffered agonies at her age, being made to wear dresses that my mother thought were lovely on me. I can assure you my contempories laughed themselves sick at this frumpy girl dressed in knee-length Marilyn Munroe style dresses, although I did not by any means have her figure, at a time when everyone else was in mini-skirts!
If the girl comes home in tears because no-one liked her dress or asked her to dance, then you will have to pick up the pieces, but I hope and pray she will have a marvellous time in the dress she loves.