There's an entire thread on how to keep accounts active. I'm about to purchase another pair of $5 Home Depot gift certificates using my two kids' accounts - it'll be 18 months in January. Since they emailed you about the expiration, can I assume they emailed you warning you of the expiration (as I also just received 2 months early)?
Am I out of line to think that US should have not taken those miles given the fact that she flew them?
IMHO, yes. You did nothing that met the rules that are pretty clearly defined.
my position is that US had a dividend miles customer sitting in one of their seats,
being flown somewhere by USAir, at their cost, for no ticket revenue. Not much of an argument, IMHO.
It would be nice to do it as a customer service gesture, but the "no waiver, no favors" policy went in place long ago for those who fly 52K miles every few months. Frankly, it would be unfair to them if they waived this (though I'm in favor of being reasonable in all cases - probably won't happen in a still distressed industry).