Hopefully she will recover without any scars (physical or emotional). I think it is great that they went to the pound to get the dog and even adopted an older dog so it is especially bad to see someone trying to do the right thing have to go through something like this. The only thing I can say about the pound is that there is only so much they can do to test the animals and it is very possible this one never showed any aggressive behavior. They typically only have the dogs for a very short period of time and due to the number of animals they have, get to spend very little time interacting with each one. My guess is that many of the employess are even volunteers. While it is easy to place blame on them, the fact is sometimes the unpredictable happens.
Again, I hope your niece recovers quickly and fully.