Of course it depends upon the child, but I was subject accelerated two grades in reading, and it was generally a very good experience for me. Certainly it was WAAAAAAAAY better for me than it would have been to have been bored all day in a class that didn't meet my intellectual needs, as they're suggesting you do with your daughter in K all day.
The biggest issue I see is that it sounds like the literacy team is not really on board with the acceleration. Do they have the capacity to sink it for your daughter, to make her miserable? If so, it may be a self-fulfilling prophesy they're giving you...
Honestly, if that's the case, I'd be tempted to go with a full grade skip, assuming you think your daughter could succeed with it. There's no reason to give the staff a chance to mess up the accomodations if you can avoid it!
