OP, first off, I'm sorry to hear about what happened. It sounds terrible.
I do hope you all appeal this. If you calmly and professionally present an assessment of your shortfalls* and a plan to address it with measurable goals, then that might allow the school to justify giving you all another chance. As I noted to someone dismissed from a different program, your objective right now is to show you have what it take to succeed in nursing school. It may very well be that you would've passed if the instructor had or hadn't done something, but the point isn't whether or not the school or program is good enough, the point is will you/can you do what you need to do to become a nurse regardless of the quality of instruction your receive. They may point out that in the 'real world', no one is going to 'hold your hand', so you can't expect to 'be spoonfed'.
On the other hand, if the program has too many problems, it may be altogether better for your foundation in nursing to go through a different program. There's not much benefit to be had with a RN license if you feel otherwise unprepared. Many nursing jobs have an incredibly steep learning curve even for those with experience, much more so for totally new grads with just the very limited experience of a student.
*In this case, the "shortfall" may be in regard to "honing critical thinking skills". Translation: learn test-taking strategies for nursing school NCLEX-style test questions and make NCLEX review questions part of your study plan for any given unit.
I'm guessing this may be where the main problem lies since I'm assuming you all have proven your academic abilities with high grades in your pre-reqs and probably your first bachelor's (or master's!) degree as well, as that's the average profile of A-BSN students. In my nursing school experience (a well-reputed hospital-affiliated university BSN program), too many times, the rationales for the 'best' answer weren't solidly supported by anything we were supposedly being tested on, nor did they test our retention of seemingly important info such as normal lab values, drug interactions, pathophys, etc. Heck, I did better by just skimming for studying. If I really dug into the materials, I would end up "reading too much into" the questions, making it that much more difficult to identify the 'best' answer. Some of the questions were written such that it seemed even a group of experts could debate over what exactly the "best" answer is.
But maybe your current dilemma is a totally different issue altogether?