The bolded part makes me think you saw the episode too, but in case you hadn't, the last three clues in
today's episode were in the category of International Disputes. Here are all five clues:
$400
Argentina still asserts a claim to these islands, though it renounced the use of force to recover them in the 1990s
$800
Greece & Turkey bicker over numerous boundaries in this sea
$1,200 (Daily Double)
Though usually friends, China & this country dispute ownership of islands in the Yalu River
$1,600
For decades, Singapore has complained about the price it pays to get fresh water from this country
$2,000
Denmark & 3 other countries squabble over the size of the continental shelf of these islands midway between Norway & Iceland
The top two clues had already been revealed; the bottom three clues were the last on the board. In my opinion (and in Nancy's defense), the category gets a lot harder between $800 and $1,200. But even if she thought she'd get the Daily Double right, I don't see why she'd wager enough to take herself out of play with a wrong response. A wager of, say, $3,000 gives her the lead if right but keeps her in play if wrong. If she goes down to $7,000, the leader can still create a runaway, but now he has to earn it.
To be honest, her inability to even attempt a response for the last two clues (no one buzzed in) makes me wonder if she understood her tactical mistake at all. As it turned out, all three contestants were incorrect in Final Jeopardy, so she could have won with a strategic bid had she not put herself out of reach. Now I'm just not sure she was capable of making a strategic bid.