Heavens, no! Although some 3-year-olds can write their names, most children this age are just beginning to identify letters and numbers. Confusion is the norm now, not the exception. However, the teacher might be picking up on subtle signs of a learning problem, which can be handled most successfully when caught early. If she's still worried in a month or two, ask for a written report to share with your pediatrician. At that point, you can decide together if further testing is a good idea, but odds are your daughter is just fine.
The thing is, every child learns in a different way and at a different pace. Though gaining a solid base in early math and reading can give kids an academic edge in elementary school, preschool is about more than numbers and letters. It helps kids learn to interact with others, to listen and follow directions, and to grow comfortable using their hands, whether it's by drawing, molding clay, or building with blocks. And through play, especially imaginary play with other children, preschoolers learn to regulate their behavior and their emotions, a skill that many researchers feel is absolutely crucial for success in school later. So the numbers and letters will come. Right now, your daughter's doing exactly what she should be doing -- having fun as she explores her world -- and laying the groundwork for future learning.