There's a lot of research showing that rewarding people for doing things is a good way to put them off choosing to do those things - I think that's OK if everyone knows that the thing being rewarded isn't fun and wouldn't be done by choice, but needs to be done for some reason, but I really wouldn't reward reading!
One thing I remember from my very early reader was how easily he tired. It happened often that in one paragraph he'd read words I had no idea he could cope with, but a couple of paragraphs later he'd start to need help with "and" and "the". I think you need to remember that reading at all at this age is unusual, and that the way the skill develops may not be what we expect, or what the writers of easy reading books expected.
Our policy was never ever to push him to read more than he wanted to, *but*:
- to allow him to read to himself in bed at night, when nothing else except going to sleep was permitted;
- to be willing to help him read a story if he wanted another story after our voices were tired (really - he was insatiable :-)
Reading is inherently so much fun that you really don't need to give incentives for it. I understand being concerned about the defeated look, but TBH I'd rather take that as a signal to back off than as a reason to push through. She's too young, IMO, to be expected to understand intellectually about keeping working at things which are hard (though I'm sure someone here will have had a kid that age who did understand that!)
