Regarding when to "cut off" the wedding money, I guess I think that when a couple is living together, in a financially better place than their parents, it's time to reassess who will be able to afford to pay for a wedding. If your 'child' is still in college, or struggling financially at a dead-end or low-paying job, one would anticipate footing more of the wedding cost than if the 'child' is earning more than her father! To me, it's not really so much an age-thing as it is the ability of all parties to pay… unless, of course, you have been stashing money away for this forever and simply want to, or can afford to, pay for the wedding.
DD21 and her very significant boyfriend are not yet engaged, but they are "pinned" (Greek thing… they and their friends take this seriously) and have started looking at rings, talking about what each likes in a wedding ring, and making plans on where to move together after college, so I guess they are as serious as can be- just without an engagement ring yet, because as college students, he can't afford that yet. DD and I have talked about what we can afford, wedding-wise, what's important to include, what can be ignored/eliminated, and where to cut corners when it comes time to plan. DH and I want to pay for as much of her wedding as we can, but she understands our limitations and is, luckily for us, a very down-to-earth girl who wouldn't want to spend excessively for a one-day event, regardless of its importance.
OP, I think your DD just needed a reality check. My guess is her curtness was out of disappointment, and maybe surprise/shock, that things weren't going to go as she'd anticipated. It's not worth worrying over too much at this point, as they aren't yet engaged, but it's good that she knows where you are coming from financially. When it comes to wedding-planning time, give her a figure that you are willing to contribute, and stick to that. DON"T tap into your retirement account- the fees associated with doing this make it a hugely expensive undertaking and not something I'd consider except in a true emergency, especially when it also effects your security down the road. I think if you and DD have honest conversations about finances, it'll go smoothly. I'm sorry she was unkind in her initial reaction to your announcement about the money you'd have available for her wedding… I am sure that hurt you. I know it would me! I bet that now that she knows the parameters within which she'll need to plan, you guys will have a TON of fun doing so, and she'll have a beautiful wedding without financial regrets.