Looking at this and your other posts, I have a couple of thoughts.
First, your daughter needs to learn that comparing herself to others is always a losing proposition. There will always be someone better at this, faster at that, more talented, prettier, taller, better grades, whatever. She needs to learn the difference between being THE best and being HER best. The only fair measuring stick for ourselves is our own mirror (if you know what I mean). Is she working hard, having fun, and improving in her dance? That is all that matters. The world of dance/sports/cheer/etc. is competition. Sometimes you win, other times you lose. That is just part of life, and will only get worse as she gets older.
Secondly, if there is a chance to move dance studios I would do that. I know in our little town there are three really good studios, so I would assume that Pleasanton has at least one other good one. Switching teachers and studios will give her a view of what it is like somewhere else. She may like it better and fit in with the other dancers well, or she may find the same situation and learn the lesson that the dance world is just like that. Then she can make the decision if she wishes to continue being a part of it. Dance should be fun. Anything a child puts this much effort into needs to be a passion and not a chore. If she truly loves to dance it shouldn't matter what anyone else thinks/does. It needs to be about the dancing.
I have two daughters (13 and almost 16) They both have been involved with cheer, dance, and several different sports over the years. They have now both settled into soccer (suprised me!). They love it and although not the star players, they love their teams, coaches, and most of all playing the game. They never miss a chance to kick the ball around. Because they love it, it doesn't matter to them if they make Varsity, or get the most playing time, or score the most goals. It is all about being able to play. I think your daughter needs to get to that with her dance. If she is not passionate about it to the point where other's success/weaknesses don't matter to her, she may need to continue her search for her passion, for something that makes her feel good about herself, not always feeling inadequate.
My two...