Is it failure?

I watched Kennin burst into tears while doing her homework tonight.  I mean, just burst.  Sobs.  Real tears.  Because all the other kids know all of their letters and numbers and she doesn't.  It broke my heart and it took everything in me to choke back the tears myself.  I hate this.  I don't know how to fix it.  It's like there's a wall in between her and I and I don't know how to get through it to get to her.  We do flash cards with the alphabet, we count on our way to school, I wrote her sight words on the mirror and I quiz her while she's getting ready for bed.  Am I doing this wrong?  Is there a better way?

Last year her Pre-k teacher said she "needs more help" but her only suggestion was to put her in public kindergarten.  So I've done that.  This year her kinder teacher told me that she "needs to work more on her letters, numbers and sight words" or she will be labeled "AT RISK!"  What does that even mean?!  At least the kinder teacher had more suggestions for activities to help Kennin learn.  She suggested using her sight words as passwords.  So before Kennin gets to play her Spiderman video game she has to tell me the sight words.  The point is to make the words important to Kennin.  So far, I haven't seen an improvement.

Is this what it will be like for her?  Will she always struggle?  I don't want her to feel like she's not as smart as the other kids.  I want her to be successful.  I just don't know how to reach her when we are already trying so hard.