This argument while good misses the key philosophical point - is the left suggesting that public officials should make national policy decisions based on their own family's self-interest? Are they suggesting that Bush's decision to go to war would (or should) be different depending on whether or not his daughters would see combat? If Bush made economic policy decisions based primarily on whether or not it would enrich his children, that would rightfully be called corruption. Same thing applies here - it should be irrelevant whether or not Bush's daughters are in the military.
I recently saw statistics showing that Congress's children are serving in the military at about the same percentage as the general population. I believe this figure was 1.8 or 2.8 percent. As would be expected Republicans kids were overrepresented in this number and Defeatocrats are underrepresented.
While I definitely agree with you, I think that that way of explaining it is a bit too cerebral for use in a face-to-face argument with someone who's already broken some rules. It's correct; it's just not aggressive enough.