Self-selection would be a negative, but in this case she didn't choose herself.
You can argue that the person who chose her had a personal gain which could cloud his judgment, but there is no evidence that it did, or that he did gain, or knew he could gain. This is just a "possible" advanced by Frum to explain why he didn't like the nomination.
If you pick the right people to advise you, you don't have to worry about them giving you bad advice because they will personally gain. If you pick people who are looking for personal gain in their advice, this particular issue would have been the least of our worries in the administration. Every day Bush gets advice on many things, some of which could reasonably benefit someone giving the advice.
They asked a host of political ethicists and professors of ethics whether the process by which Miers was chosen was correct, and they were almost uniform in the opinion that it wasn't.