M.O.
I'm not sure why it would be that bad for you and your husband to have a meeting with "Mrs. Smith." It sounds like hearing it from someone else, especially someone with a lot of experience in this area, is probably just what your DH needs.
I know with my husband, we pretty much take everything the other one says with a certain amount of salt at this point, and it can help to have another voice in the mix. I also think there's a tendency for men, even if they're fantastic, involved dads, to read fewer parenting books and to spend less time comparing notes with other parents (huge generalization, right? your husband + my husband = all men ever, LOL). So for them, their own childhoods loom larger b/c they have less other data rattling around in their heads.
You might also talk to your husband about some of the PROBLEMS that occur when children repeat grades. Your DD could easily get bored and start developing a bad attitude toward school. She could also feel stigmatized and conclude that she's dumb (this happened to a cousin of mine who was forced [I think unnecessarily] to repeat a grade, and it's shadowed her through her whole life, to the point where she refuses to contemplate a "real" professional career). There's also a good chance that if she repeats kinder, she'll go through puberty before most of her peers, which can often leave girls feeling very self-conscious and ashamed. And again, the effects of this LAST.
So, I think you're right. But your hubby might need to hear it from someone other than you.