If she keeps dominating dudes like that, then yeah, time to move to a better division, but I think it's great that she's willing to grapple in the boys' division. The girls' divisions probably aren't all that deep (I base that on what I've seen at local comps), and rather than be the big fish in the small pond, Kyra's seeking out tougher competition.
Also, let's give the boy some credit. He knew he wouldn't get any credit for winning and risked getting laughed at for losing, but he accepted the challenge. Anyone who makes fun of him for losing to a girl ought to be willing to put his own rep on the line too. And after seeing that, I doubt many will.