You're right - they didn't have to accomodate her, but they did. By making the accomodations, they basically proved they could provide her with a job. They kinda shot themselves in the foot with this one.
Yes, but I suspect that even with the accomodations she could still not perform the essential functions of the job. They gave her two years and she was still at below entry level for that position. Even the ADA does not require that you employ people who, despite reasonable accomodations, cannot do the essential functions of the job. The problem is that when you hire these people and give them accomodations, you have, for all intents and purposes, hired yourself a lawsuit.
It is lawsuits like these that hurt the people the ADA was intending to protect.