I think your dd handled it well, but more importantly, does she think she handled it well?
That's a good question. I almost felt that she was parroting my words but that she didn't believe them. DD is embarrassed that she was in the lowest spelling class. Part of her problem is that her vocabulary is at a much higher level than her spelling ability. She is frustrated that she has "baby words" but readily acknowledges that she can't spell them consistently in her written work.
Her crying reaction afterward would have gotten a different response from me. I would have agreed with her about her observation, and then challenged her on the use of absolutes to make her situation appear more dire than it is.
I think that her use of absolutes is what bothered me but I couldn't put my finger on it. It had an air of hopelessness and despair. Lately, she has been labeling herself as a "failure" at anything that she doesn't do particularly well. For example, she said that she was a "failure" when she played a bad hole of mini golf. I have been challenging her on her use of that word and questioning her about why she is categorizing things that way. I don't understand why she sees herself that way, especially on something like mini golf where no one in the group is expert.