12 years ago things were very different and hospitals didn't have the technology to do the early pregnancy scans that are available now. I'm sorry about what happened to your auntie though. I suspect a lot of times when people have bleeding that turns out not to be a miscarriage, it is a vanishing twin. They just wouldn't necessarily have been able to routinely spot this back then.
D&C used to be routine for miscarriages back then too. But some women actually prefer to let nature take it's course, or to have medical management. Not everyone want to go into a hopsital and have an op under general when they are already traumatised. Sometimes a D&C is the best option.
My personal experience is that both times I have had a miscarriage I have been offered a choice of how I wanted it to be managed. The first time I did choose the D&C and they were happy to let me do that at 10 weeks. The second time I also had a free choice and I had medical management at 9 weeks. It is not true that they don't do anything before 12 weeks. They do tell women that natural management is safe if you don't have signs of infection, and perhaps they want to avoid women having unnecessary surgery. They told me the D&C is not risky, but there are risks with any operation and I would worry about having too many and possibly weakening my cervix.
Miscarriage is a personal tragedy however it is managed. Doctors are not always entirely sympathetic and can treat it as business as usual. I don't think the NHS failed your auntie as they did a scan before they operated to make sure! I'm sure it was a very worrying time for her, but I still believe misdiagnosed miscarriages are rare these days, especially now we have transvaginal scanning.