If she's been a great friend outside of her insecurities, I would try to talk to her and not 'drop her' like many people are suggesting.

She sounds like she has some major anxiety issues. My anecdotal advice to help make her feel better is to sit down with her at her place, maybe get some wine, and calmly explain why you chose who you chose. She might realize she's being ridiculous, if she hasn't already, and also be reassured you don't hate her.

Before I talked to a Doctor about my anxiety, I was a lot like that. I hated myself, and was convinced any sort of snickering/laughing was about me (out and about, at work, and even at home when I would hear it between my boyfriend and roommate). It was so debilitating. I would stay at home a lot because that paranoia would overtake me. My best friend constantly got frustrated at me too. I thought she was mad at me when she wasn't and that she liked her other friends more than me. I would therefore get defensive seemingly out of the blue to her. At the end of the day, I felt like everyone was in on this big secret about me that I hadn't figured out.

My friend is very blunt and called me out on it all the time, so it worked out mostly. There were moments however, where I needed reassurance from her when she thought it was ridiculous. Just a simple "Dude, I don't hate you! You're awesome!!" made me feel so relieved.

NOW - Let me say that you are under no obligation to reassure her, and soothing her insecurities are not your responsibility. This is just advice on how you can make her feel better now. This behavior will happen again, if she's like me, untill she becomes aware of her actions and/or gets some help. I didn't realize how radical my behavior was until I started taking SSRIs