We dropped a grade skip partially because my son doesn't want to do it, so yes, I would drop it.
I have 10 yo twin boys and they behave like your dd. They absolutely refuse to be in the same class. They have gone out of their way to avoid being in the same classes or activities since they were 4. One of my boys is PG, the other is HG/2E. My 2nd boy, although he qualifies, refuses to be in our district's HGT program because his brother is in it and achieves more academically than him. Like your dd, it's more his issue than his PG brother's. But I really can't blame him-- who wants to be "2nd" all the time?
We're letting my HG/2E boy make the choice in elementary school. But for middle school, he's not going to have the option-- the boys will be able to take the same HGT classes (not math, because one of my boys is radically accelerated), but at different times during the day.
The boys have carved out their own niche in sports, musical instruments, style and hair cuts, etc. They absolutely do not want to compete with each other, so I do understand why they don't want to be in a position in school where people would compare them. That's why we're not forcing my other son into the same class as his brother.
I wonder if in your position, you could continue with ALEX at home? Or tell your dd that if she doesn't go into the proper class for her math ability, she'll need to do ALEX at home, and let her make that choice?
