I've noticed that in sports, they are not as quick to advance better athletes even if they are younger like they used to. Parents are quicker to sue should something happen to their child than 20-30 years ago.
So that in itself could be an issue. Also, there are MANY parents that think their child should be in a more advanced level, but clearly the child is not ready.
Obviously, the best thing to do would be to seriously talk to the teacher. Maybe make a tape of your DD and say, "I want you to look at this when you have time, and let me know what you think. Let me know what you think *I* can do to keep her growing in dance when she's not in your class".
Often times, when you put the issue on your shoulders and are only looking for guidance (even if that's not the true intent), a teacher or coach is quicker to be on your "side" about things. Does that make sense?
Good luck!