That score though is for the end of 8th grade, and they're saying that 5th graders need to have reached the end of 8th grade score before they even start pre-algebra? 6th grade pre-algebra is where they teach 6-8th grade math, so if I understand you it's saying that they should actually have mastered 8th grade math before it's taught?
Well, if you think about nationally (which is how the SMI is normed) many many districts do Algebra 1 standard in 9th grade, not 8th as is APS's norm (and probably the norm in Northern VA as a whole?). Anyhow, The purpose of prealgebra in 6th grade is to master up to the 8th grade standards, take the math 8 SOL and then move on to Algebra. The math 7 and math 8 standards have a lot of overlap and the majority of kids who take Algebra 1 in 8th grade never take standalone math 8. They either take Math 7 and then Algebra 1 or take prealgebra for 7th, which is a combined Math 7/8 class with the Math 8 SOL at the end, and then move on to Algebra 1. The SMI isn't aligned to the VA SOLs. Its a proficiency test but not a standards based test.
I don't know what SMI score is needed for 6th grade pre-algebra. Because that class is designed to make the student ready for algebra so they wouldn't need to have the 1030 or 1090 score prior to the class IMO. But they'd probably need to have a benchmarked score higher than 6th grade just to show they are advanced since it is the advanced track. APS seems to want fewer students to take Algebra in 7th for sure. My son took it and he did well and also did well in 8th Geometry. My older son did Algebra 1 Int. in 8th and he's also done just fine subsequently (rising senior going into Calculus BC).
Middle school is a big transition in itself that requires a lot of maturity for the student. I would go with what was recommended for your child unless you feel it is egregiously wrong.