Well, I can't speak for high school classes, but I've done almost my entire uni degree (through Eastern Oregon University) from 50 miles from where my uni is actually located without much traveling to campus. This has meant mostly online and independent study classes...though several have been at the place here in my town where my exams are proctored. My choice to do this was mainly because at the time I enrolled I couldn't find a way to move. I was tied to a town without a uni actually in it, and I knew of Eastern and knew it was a good school (many of my high school teachers went there), so I decided to try their distance ed thing.
Anyway, that place you linked is accredited, so her diploma would be legitimate and everything. If you're wondering about other options, you might want to see if your local community college does online courses. I know that the one near (well.."near" being 100 miles) me does and a few kids I knew used credits from there in order to graduate with our class. So if she still wanted to walk at graduation with all of her friends and stuff, that might be an option. The tuition looks comparable to a community college anyway. Oh, and you can get financial aid for a community college.
But as far as her inability to concentrate goes...it's infinitely harder to get motivated doing independent study courses. A lot of mine have videos of taped lectures from the on-campus version of the class, and that also requires sitting in one spot for quite awhile. Though there's always the pause button, of course, which is something she wouldn't have in a physical school setting. There are so many distractions that are readily available...like the forums and IRC for me.
That being said, though, I'm quite happy with the education I've received. Sometimes I'm kind of sad that I don't really have any uni friends to show for the past four years. I just have uni acquaintances since I see them so infrequently. But as far as actually learning things, it's been great.
The social aspect of it is definitely something to consider, especially in high school. It might be kind of alienating for her if her friends are always talking about things that are going on at school that she doesn't know about. It was a bit different for me since at the time that was really my only choice if I wanted to actually get my degree (I'd already taken two years off after high school, and knew that if I put it off longer I might end up not getting it at all).
I'd advise your sister and parents to talk to the high school guidance counselor if they haven't already. There are a lot of things to consider, but yes independent study and online courses can offer a good education. I think it all depends on the place you're doing them through, which is why I'd suggest a community college. The instructors there will probably have less students and be able to pay more personal attention to her. And I think a lot of community colleges do distance education these days. Anyway, good luck to her with whatever she decides to do.