Coming at this from the perspective of a much older child...
the answer to "is the tiny incremental improvement worth it?"
is a resounding YES in my estimation. This is, in fact, the entire point of all of the repetition in regular curriculum. Most kids need a lot of practice/repetition and not all of them make impressive gains all of a sudden-- ever.
I think that parents of gifted children have some trouble wrapping our understanding around the need for a LOT-- no, really a LOT-- of practice at some skill when it doesn't really seem like the progress is "worth it" or maybe even happening at all. If it is causing change, it must be happening on something like a geological time-scale.
It's even harder when that area is in contrast to the virtually instantaneous, effortless leaps in cognitive ability that we've come to anticipate with such children.
But if it's a skill that is truly necessary to your child as an adult (or young adult), and I'd argue that reading text very certainly IS such a skill; then you really can't "give up" unless there is a documented, organic reason why progress is truly impossible. If you have an expert opinion there that says "your child cannot learn to read because ____" then, okay-- adding more time and angst there is pointless.
But otherwise, I'd probably opt for a mix of things here.
Agree that your child can use audiobooks for pleasure in an UNLIMITED fashion (that is, as you'd allow any other child to read for pleasure). Also agree that the price for that freedom is that he must spend some percentage of time using the audio along with the written text for schoolwork.
That's me. While DD doesn't have any particular diagnosed disability w/r/t writing, it has been a battle of epic proportions for almost a decade. She hates to write, and loathes practicing the skill; naturally, she doesn't do it very well in light of those things. But we are finally (after years and years of firm but compassionate insistence) seeing some results for our intense efforts. It's been slow and unsatisfying, to say the least.
I guess what I'm saying is that you are unlikely to get "marked results" except by comparing progress year-by-year, not even 'month-by-month.'
Do not give up!!