As a middle school teacher, I was surprised to read your concern. I have found that good middle school environments tend to be "warm and inviting." It seems that your daughter may have a teacher with a perfectionist-type personality. Consider conferencing with the teacher about your concerns; perhaps there is more to the story. If you continue to have concerns after your conversation, schedule an appointment with the principal to see what possibilities/alternatives may exist.

This can be especially frustrating, to see your daughter get the gist of the content correct but get docked for reasons that have little or nothing to do about the subject matter.  I have encountered this sort of thing with the 40 kid-school-years I've experienced with my kids, but not to the extreme that you describe.

The first thing I would do is to ask the teacher for an explanation of the thinking behind the policy - not to craft an attack on it but to seek an understanding of his or her motivation.  I strongly suspect that nothing is going to budge the teacher from this stand; it strikes me as a personal value of the teacher and any attempt to change it directly or indirectly has a decent chance of backfiring.  But by understanding it, you may see ways to keep your daughter from getting too discouraged in the face of it.

The second thing I would do is directly help your daughter with homework in this class by proof-reading everything.  While it is true that a student will "get it" eventually when under such a strict policy, you can help by editing and point out, but not correcting, mistakes.  This may seem like "cheating" but in the college, grad-school, and after-school world, we all rely on each other to correct our mistakes and everything comes out better - ourselves included - in the process.

This kind of strictness is not unlike things that your child will encounter later in life in the workplace, and learning that there are people around to help get through it can be a valuable lesson.