I don't think many would argue that Regina's irrational response makes sense in a twisted way. It was an interesting way to make Snow pretty blameless and still fully responsible in Regina's mind. I looked at the TWoP archive from this episode, which gave the immediate episode reaction, and most agree with your sentiments.
The issue is that the responses in this thread are all from at least two years after the episode aired, such that her backstory has been much more fleshed out and all of Regina's actions after this event occurred are being evaluated based on this inciting event.
That said, there are still a lot of evil actions that had been depicted in S1 to evaluate and question how the Young!Regina pictured here turned to full fledged psychopathy. Irrational hatred and need for vengeance on Snow make sense, but we've seen her send little children to their deaths, murder her own father, gleefully enslave, rape and murder Graham, arrange to have her friend Kathryn murdered, and curse an entire kingdom. And yet she feels not a twinge of guilt. She shows little emotion at all except when she's hurting people. Then she's reveling in it. The murder of Daniel does not explain her utter joy at torturing people not related in any way to Snow. If she were simply coldly going about getting the ingredients for her vengeance, I could see it - especially when combined with other events in the story. But she just flat out gets off on hurting others and that isn't something that would come out of Daniel's death.