Hmmm...Interesting philosophical question, OHG!
Well, if it's an item that is still useful, then I think it does teach compassion. Even if you don't want/need the item, if the child can see that someone can use it, then the child is able to put him/herself in someone else's place. I think that's the important root of compassion, far more important than self-sacrifice.
After all, you might sacrifice something that you dearly love, but that doesn't mean that anyone else will want it. My son has a favorite t-shirt that he'd rather die than give up, I think, but that doesn't mean that anyone else would want to wear the holey, stained, faded thing!
I do love talking philosophy, OHG, and I don't get to very often. You made my day!
Oh, and as for the fire issue, Isa: it can be useful to talk numbers with GT kids. Talking about how few houses burn can be useful for helping them gain perspective. Point out *all the houses you see* that are not damaged by fire ("That one's not, that one's not, that one's not..."), and the older they are the better: "See! That house is 200 years old and not damaged by fire."
And I agree with OHG that talking about prevention and safety plans is key. If your DD feels like she has some control, some way to prevent the situation that scares her, she probably won't be as scared by it. Enlist her eyes to look for appliances that aren't unplugged, a stove that isn't turned off, some fabric that's too near a heater, that sort of thing. Talk about never playing with fire/matches/lighters. Teach her how to call the fire department. Show her your smoke detectors and how they work. Give her some control.
One other thought: this sort of worrying is really common among GT and sensitive kids. It's hard to watch, but it's pretty normal. It sounds to me like you're handling it very well.
She'll get through it in time if you keep giving her the tools to do so, just as you are.
{{hugs!}}
