I found a good article on the subject of paint failure due to water and drying issues:
http://www.greenhomebuilding.com/pdf/RainScreen.pdf
The problem that the house in the article had isn't necessarily what is wrong with BCI's daughter's house, but it does give some good info on addressing moisture issues.
In addition to what I mentioned earlier, a third way moisture may be getting in behind the siding is incorrect flashing around windows. It has been estimated that perhaps 90% of all house windows in the country haven't been installed correctly, with respect to flashing. When you compound that with occasional mistakes in installing WRB material, top-down with the laps open upward, the only things that save some walls is protection from wind and wide roof overhangs.
When the wall in question is fixed, with replacement of the present siding, the reasons for paint failure on it likely will be apparent. BCI's daughter ought to make sure whoever does the work knows his stuff. It would be a good idea to research the subject of siding installation in order to be able to question the contractor and throw the bum out if he can't satisfy her. There is an awful lot of good information available on the net on the subject of building science.