I know of a few situations where kids with dysgraphia have benefitted immensely from audiobooks, even in the school setting. I think the key is to still work on reading, but give enough audio accomodations that they're not being kept from their potential in other ways. In short, let them audiobook to their heart's content, as long as there is frequent reading practice.
(For what it's worth, I think it's often hard to balance whether an accomodation is helping your child or hurting them. We're going through the same choice with keyboard v. handwriting on fine motor coordination.)
