You are in the right! And no, “everyone” doesn’t do it. My 2021 grad is using ours, but only because she was at a summer camp until September and now living with roommates in the same city for less than a year, but as soon as she is more settled (as in, her next move), she will use her own address.
As others have mentioned your D is not only evading taxes, but it’s unethical…she lives there and presumably has the accordingly higher wage, should be paying into the city services and schools she is using/will use, etc. And maybe she should care about her local voting? Sorry she has to go through the administrative work, and taxes, welcome to adult life!
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