This is wrong on so many levels. An athlete should DEFINITELY be enrolled in the school if he is going to compete as a member of it's athletic teams. As far as academic concerns, most school systems today have arrangments in place with community colleges/universities that allow students to take courses at higher levels if the student needs and qualifies for a higher challenge. If its a case where a student needs more one on one attention than a school can provide there is no reason that he or she can't attend school as well as get additional help from their "parent who is more qualified than the teacher" at home at night.
Fairness of the competition should also be taken into consideration as well. Is it really fair to the other teamates and opponents that a home schooled student has the option of resting up all day while preparing and focusing on a game or match while everyone else has to go through the rigors of a school day that may include taking important tests and focusing on their academics?
Participating in high school sports is a privilege and one of those requirements to receive that privilege should be that the student is actually enrolled in that high school.