This is making the assumption that a sample size of 30 kids in one school year doesn't have anomalies that will skew the average and that the testing for reading levels such as the DRAs are foolproof?
To your first point...maybe 30 kids isn't a big enough sample. I'm not suggesting this be implemented tomorrow as the absolute standard on which to judge teachers. Maybe they need to be observed over 3-5 years, maybe we can try to control/adjust for other variables. What bothers me is the idea that because measuring teacher skill/success is difficult, we shouldn't try at all and just use seniority (or absolute test scores) as the single deciding factor.