Your daughter has and uses your Apple account, and you're surprised that she can reset the password? I'm really confused by this story, much less how Apple is in any way to blame or this is at all surprising.

As an aside, what you described is serviced by Family Sharing now. I have my wife and my four kids in my Family -- literally and from an Apple account perspective -- and they all have access to my purchases (and each others, unless the product specifically forbids it which is rare), my Apple One Premiere, etc. It's a wonderful system.