Oh hon, I feel so bad for you.
When you said she's been "struggling since kindergarten", I can't help but be reminded of a book I've seen recently entitled
"What Happened to Recess and Why Are Our Children Struggling in Kindergarten?" It might interest you.
The subject of discipline is so difficult - every child is different, and what works for one kid may not work for yours. But harsh discipline and punishments can break the spirit of many sensitive children and frequently only has short-term benefits. (They do what you want, but for the wrong reasons - because they are scared of punishment, not because they are really understanding what you want them to learn.)
Mary Sheedy Kurcinka has some great books on "Raising your Spirited Child" while treating them with respect. Some of the brightest children are also the most stubborn, and it can be difficult to get out of the confrontational mode - it's hard to figure out how to work WITH them and not against them all the time. But it can be really hard to do. You lose your patience and just want to reach out and yell or spank - do ANYTHING to get it over with. Parents who demand respect from their children without modeling it back, without treating the children with respect as well, are doing them a disservice, in my humble opinion. Also check out "Unconditional Parenting" by Kohn -it's on DVD if you're tight on time.
I know nothing about your child, I certainly can't say whether meds are appropriate, are doing more harm than good, but I am concerned with the trend in general.
Some schools are expecting too much of children - some young children just need more free time and more time to run around and "get the wiggles out", and if every class has the 2 most rambunctious kids on medications, (which is quickly becoming the typical classroom these days), over time it will skew educators view of what is "normal behavior" for kids and their concept of "developmentally appropriate expectations". (In other words, if the one kid that was the "class clown" is medicated, or removed from the classroom, then some of the other children, who only occasionally acted up, will be seen as the "most disruptive kids in the class", by definition. Normal behavior is gradually seen as abnormal, and children who don't meet the expectations get held back when perhaps the problem isn't the child, the problem is what is being expected of them.)
On the other hand, perhaps holding her back a year will be the best decision. Not because of intelligence, but because of the emotional development and plain old maturity that comes with age. "The gift of time" as some educators call it. The difficulty of material isn't all that different from one year to the next, and hopefully her future teachers will be able to keep things interesting enough that she's not bored in school. (A lot of times, it's not whether things are too easy or too hard, the concepts are just presented in a manner that's boring! At least that's how I remember a good portion of my elementary school days.)
My best friend has just gone through a lot of turmoil this year, and she finally decided to hold her son back in preschool one more year. (She has come to hate the expression "the gift of time", by the way.) But she knows there are plenty of things she can teach at home, things they may not talk about in school, so she's not too worried about her son "getting bored". And she realizes that she'll get the gift of one more year with her child before he goes off to college (crossing her fingers).
She also knows several children who were not held back from kindergarten, and then 2nd grade became the "big deal". Having to repeat 2nd grade was more traumatic because the children have a better idea of the expectations, the trend, and where all thier friends are.
So, if it must be done, perhaps sooner is better than later.
I don't know anything about your situation, but I am concerned that the population of children are being over-diagnosed and over-medicated. The reason I have such mixed feelings about medications is that, although I'm sure it's appropriate for some families, I have a child in my family that I have known since he was 2 that has been diagnosed with ADHD/hyperactivity , ODD, and the lastest thing now is "possibly Asbergers". This little 5-year-old that has been basically on a cocktail of various meds since preschool. I've always thought my nephew was basically a fine boy going through a lot of difficulties (abandoned by his father, raised by a single mom who has very few financial resources. There was never any access to high-quality daycares, and every time I've seen him, all the adults have unrealistic expectations of appropriate behavior for a 3,4,5 year old. I mean, at four years old, he was fussed at every time he ran in the park. Not running in a restaurant or grocery store - in the park! It was always "Stop running! You'll fall and hurt your knees.")
So now he behaves perfectly, sits still during long meals, never interrupting the adults, etc, but he looks like he's stoned. Seriously.
It's a tough situation for everyone in our family, as I'm sure it is for yours as well. My heart truly goes out to you.