Lawsuit or no lawsuit, if she's proven she can teach according to Jazzercise's fitness standards, then she should able to teach. We talk all the time about genetic limits here (think Natty vs. Gear arguments), but it can't apply to this woman? She knows what her body's limits are. It sounds like she's worked hard. So she doesn't share the same goals as you.
As far as the "right-ness" of a lawsuit goes ... if there's a statute protecting her, then she's got a right to pursue her violation through legal means. The issue, then, is whether the law is "right." Is it? Which of us can say? There is more to consider than just the language of the law because the contexts under which laws are enacted are as crucial as the law itself. (I know that doesn't nail down my position, but I don't have the legal expertise to comment with authority).
I, too, have a difficult time accepting the "poor me" routine that all types of people use to avoid making changes in their lives -- and they come in all shapes, sizes, races, genders -- but I also understand what triggers change in these same people is as different as the people themselves. Be happy she's doing SOMETHING and wants to help others do SOMETHING besides walking on the treadmill for 10 minutes and then watching TV eating prunes.
And your argument about hacking your own legs off, while intriguing, isn't valid here.