I have a GC and i got married to a British Citizen last year. I have filed an 1-130 since last year and she has been coming ever since on her visa waiver to visit. Unfortunately she was refused entry last week and her visa waiver right was revoked.

The Immgration Officer said she has been coming too often although she has never overstayed. I cannot understand this logic. Are they suggesting that she should have stayed back illegally instead of coming to see me and going back to England. I am frustrated and i do not know what my options are.

The INS has determined that your wife has been using the waiver program to essentially live in the US. This is not their definition of a tourist. When someone using the waiver spends more time in the US than in their home country, INS probably assumes that this person is abusing a privilege and they take it away. Since you have filed an I 130, your wife now has something called "dual intent." She claims to be a tourist but she wants to immigrate (and understandably so). However, a person from another country, like the UK, must demonstrate non-immigrant intent; that they have a life elsewhere than in the US. Sadly, there is no guaranteed solution. She will find it tough to qualify for a tourist visa or a student visa (a student must convince the embassy that they will return to their country after studies)...again, a tough proposition for her because after a 4 yr university, your petition would likely be ready and she would adjust status in the US. The embassy knows this.
The only other realistic solution is for her to qualify and obtain an H1b visa, for example. That requires many things to be right, but it is a chance.

I just want to say thank you for taking time out to respond to my question. I appreciate it.