I think that its great that you were open minded enough to allow a student with special needs on to one of your squads. Thats fantastic. It could be a real growth experience not only for your special cheerleader but for those around her as well.
Ofcourse, this requires a special kind of coach too!
Don't be too hard on the new coach though...maybe they aren't as comfortable coaching people with special needs (this can take a super human level of patience at times) or maybe they're taking the program in a different direction (competition = change in requirements). Hopefully your special cheerleader can find another way to be involved at school.