Yeah, I don't see much benefit from having both reading and English as separate classes. That said, what would she do instead? If there's some other class she really wants to take that skipping reading would allow into the schedule, then I'd focus on that. ("DD would so love to take orchestra/French/whatever this year, but she can't fit it into her schedule if she has reading. Since she'll be waived out of reading next year because of her test scores anyway, we're wondering if she can take orchestra/French/whatever instead of reading this year.") Basically, focus on what she would do instead of on what she would miss.
On the other hand, if the choice is between reading or an extra study hall, I'd decide it wasn't worth the effort and just leave her in an easy reading class.
