Yes, I would let her quit. Here’s why. First of all, she’s just 7 years old. She’s trying to figure out what she likes and what she doesn’t like.
I think that sports are given far too much attention in children’s lives. She’s not on a competitive team where she has teammates depending upon her to win.
I agree that you don’t want to set a precedent of trying and quitting, but there are many other places to do that – with her schoolwork, with commitments to friends, etc.
Playing softball in the first grade is not one of them.