Overweight kids all over the world compete. She isnt the first and she wont be the last overweight person on a row team. As far as housing, she put herself in a position to where her housing situation will not be able to get better until some of those kids move out, get jobs, or she gets some help (hopefully from a guy that doesnt want any more damn kids).
Sounds to me like the daughter wanted this very bad. A good parent would bust their ass to give a kid what they want. Saying sorry you cant have fun until we can afford a house is a bit over the top. Personally, I would have spent the money on a personal trainer and made her prove to me that she really wanted it.. but thats just me.