pianokey You are confusing two issues, 1) lots of children wear handmedowns. 2)your daughter does not want to clothe her child in secondhand clothes she does not like.
When peoeple hand clothes on the recipient will still decide what clothes among the handmedowns their child wears. The clothes passed on that the parent likes, the children will wear. the ones te parent does not like will not be worn.
I had two friends passed on clothes when DD was small. DD invariably wore one givers clothes and rarely what the other one gave, because her taste was very different to mine were rarely worn.
You offered your daugher secondhand clothes, for which you expected her to help pay for, quite reasonable, but the clothes were not to her taste so quite reasonably she refused to pay, at a time when money was tight, The problem was not that the clothes were secondhand, the problem was she did not want use her limited resources to buy clothes for her child that she did not like.