I live in a rural area where the nearest decent violin teacher is four hours away. Really good teachers and accompanists, youth orchestras, etc. are an eight hour drive. We go to the city four hours away for music lessons, but DD 15 is really pushing her teacher's limits. She needs a more advanced teacher, but the closest ones are eight hours away, a distance which isn't feasible for us on a regular basis. If DD was recieved a scholarship to a conservatory, I'd probably let her go. I would sob and moan and lament her moving so far from home, but in the end, if she wanted to go, I'd let her.
We have good friends who live even farther from musical activites than we do. Their 16yo has just started at Curtis and is loving it.
So I guess that's my long winded way of saying, "Yes, I think I'd let DC go".