Did you see the outfit she made for her audition video (it's in one of the episodes of Hot Tea where Trixie was a guest)? The orange monstrosity with the cheeto puffs hot glued onto it? It was really rough and didn't really show very much effort, IMO. If that's the best she can do at home with a so more time, access to a wider range of supplies, and (though pretty cheaty) the potential to get outside help to make it, it doesn't really bode well for what she'd be able to pull off on the actual show. And if it were up to me, the apparent lack of effort would not make me want to cast her at all.
Forgetting that one unfortunate outfit, the way she dresses in general on Hey Qween (and Hot Tea, etc.) is really casual and pretty messy. Jonny McGovern isn't referring to himself as the Gay Pimp, so I don't see a problem with him wearing jeans and a T-shirt. But she's presenting herself as her drag persona there, so again, it comes of as a lack of effort and a lack of concern over what she's selling. And I feel like Ru and the producers wouldn't want someone with that sort of brand on the show representing them.
I know she has nice outfits and can turn out a good look that doesn't involve jeans and a t-shirt or a shapeless sac, so it's kind of frustrating to see her not seizing every opportunity to put her best effort forward knowing she wants to make it on Drag Race. Dress for the job you want, not the one you have, and all that. I feel like if she started turning out more consistent looks on her webshows, Ru and the producers would see that and be more likely to bring her on board.
She has the personality for it, and it'd be nice to see a transwoman on the show in her own right (i.e. showing up on day one identifying as trans, without the producers needing an emotional/over-dramatic coming out moment and without having to hide it from anyone). There are a ton of trans drag queens, so when the fuck are they going to get any representation on the show? And be able to talk openly about their experiences being trans and a part of the drag community. Watching Lady Red's audition tapes, I think she'd do well as the first step towards more representative inclusion of transwomen on the show.
TL;DR: I doubt she'll make it onto season 9, but if she steps her pussy up over the next year, I really hope she makes it onto S10.