I think it's bizarre to suggest that she should reread what she's already done. I would try to prevent that from happening.
I would also ask if you can send in appropriate books for her. Does all the reading have to be done on RazKids? I get that it has some benefits (our school used it in 2nd grade) but i think it also has drawbacks, one of which you are experiencing - it fosters this idea that you have to progress through "levels" as fast as possible, which I think can take away from the true enjoyment of reading.
