I don’t think you made a mistake, you are 99.9% sure that first child would have chosen the same dream school. You are affording it, she is happy, that is a win. Coulda, shoulda, woulda, what if she’d chosen a merit offer and been miserable? Pretty sure you’d pay more $$$ for some happiness.
Isn’t our first kid the practice one, and we get to try to make better decisions with our experience and expanded knowledge with any younger ones? You thought you had a great strategy for paying for college, now you have a bit more perspective. There were no contracts signed, if your first child gets upset because you are trying to help the second make the best college choice for under and post grad, she has bigger problems then any ‘unfairness.’
My crystal ball suspects that in a few years when your oldest is applying to law schools you will struggle with the amount of debt she will be taking on and be changing her deal anyway.
My experience is that when you make declarative statements regarding college choice and funding you may live to regret them. We agreed that we would fully fund a highly selective fit school for four years only. DS realized that he hated most of the classes in his major part way through sophomore year but decided he could not switch specializations without adding more time, so did not let on. After watching the misery of the last year+, I would gladly pay for another semester for a happier kid. (Easy for me to say that DH could work another few months at the end of his career for that trade.) We will have different policies that won’t work for the next two kids…