I think you are being a bit unreasonable, actually. Probably, your daughter is the only child in the class who can read at a level that is any practical use, or perhaps there might be one other. There are 29 or 28 other children in the class, some of whom have had until recently no idea what a letter is and haven't been read a book in their whole lives.
Your daughter is happy at school and is enjoying herself. Plus, presumably she is learning stuff other than how to read.
I imagine that you read things that are appropriate to her reading level at home with her? So she is getting practice in reading and encountering more vocab etc.
What exactly are school meant to do? I don't see how the best use of limited resources (both time and money) would be to make a huge accommodation for the one child who can already read and get her reading better. Is it not more sensible to bring some of the other children up to a level where they can also access resources that require a child to have some reading ability independently?
I speak, btw, as the mother of a child who is a fairly long way in advance of the rest of her class with reading. She's fine. They are totally doing phonics and ai and ay and a-e and whatever but it really doesn't matter. She comes home and reads me complicated poems and Roald Dahl for my bedtime story.
If your daughter can read, she won't forget how, just because she's not reading much at school at the moment. Just get her loads of good books to read at home. And if you can't buy them, use the library or Oxford Owl.