She IS self-soothing with the pacifier. Pacifiers are GOOD!! A happy baby is a healthy baby.
When they get old enough to put it in themselves, you can start pinning the binky to their clothing so it doesn't get lost.
And like it or not, the kind of baby that really responds to a pacifier usually really NEEDS it, so it's better to give it to them. It'll make your life a lot easier. There are ways to break the habit later on. (Like cut the tip.)
(NOTE: Okay, she's not self-soothing in the most technical of terms, but I really disagree that an infant should have to self-soothe. Infancy is the time of life when people really develop emotional stability (or not), and in having their needs met they become happier, more confident people. Give 'em the binky.)