Reading that email... Wow.
I'm kind of on the opposite side of this one. You drove, out of your way, to show up at the party. You did not impose yourself upon the family - you slept in a TENT in the back yard.
For your own personal feelings, you felt uncomfortable acknowledging the fact that you're having money troubles and made a decision based upon that choice. I don't think it was a wrong decision.
Could you have bought a card? Yes. Could you have saved the gas money and sent her a card? Sure. But, you chose to be a part of the experience rather than a part of her bank account or box of cards.
A graduation is a celebration of 12 years of school and a Bon Voyage into the big bad scary world of college exams and term papers. You chose to support your niece and share in her success...
I, personally, think it was in bad taste of your family member to send that email.
I'd call your niece, explain the situation, tell her that you wanted to be a part of her happy graduation memories, and wish her the best things life could offer. I wouldn't apologize for being tight on money - that's life.
I would choose to ignore the email from your family member. No good can come of replying back to him, blowing it up, or etc. Mark it as a "huh, next time, we'll not go, we'll send a .99 card and wish them the best."