There are pros and cons.  And, yeah, they actually seem contradictory.  It's your call, and a tough one.  As you consider the move, just a couple of things to keep in mind:
 
Half the kids in level 5 are out by 6.  (Here are the USAG Stats on number of participants).  In light of this, consider the best decision for right now, not some long term goal.
 
Level 2003    2004    2007   total average   % previous of level 
                   
5    17841   17416   17400   52657   26329    
6    10779    8772     8832    28383   14192   0.54 
7     8335     6725     7357    22417   11209   0.79 
8     6517     5432     5333    17282     8641   0.77 
9     4308     3543     3284    11135     5568   0.64 
10   2319     1900     1691      5910     2955   0.53 
Elite  163        143        97        403       134   0.05 
 
How devestated would your daughter be if she tried level 4 over the summer and had to drop back or if she could get the skills but not polish them enough to place during competition?  If those things wouldn't bother her, definitely try it. 
 
I had one kid progress through the rec program (even took a 2 year break in there). She's spent a year at each level and done very well.  In here career, she's had two meets where she didn't finish in the medals in all-around, and one of those she was competing with a broken metacarpal.  She's currently finishing her gymnastics "career" as a level 8. 
 
My other kid skipped most of rec and did what other people are calling hot-shots or some other fast track.  She did a year of 4, one meet at 5, then moved right to level 6.  She certainly was lacking some of the polish of the girls who hadn't skipped levels.  She didn't place well as a level 6 and the optional coach had her work cut out for her when dd2 started training 7.  Doing well as a gymnast takes polish, not just skill acquisition.  Sadly, taking the time to polish is not nearly as much fun as learning the new skills, but it has to be done.   Please don't rush simply because your fear your daughter will get "bored."