I've seen this in pretty much every amateur choir I've ever been in; the director will avoid putting certain pieces in front of the full choir (or any of them), the major reason being some sugarcoated version of "you're not good enough to sing this piece".
I do understand some of the meta-reasons; we're all music lovers, and if we can't do a piece justice we don't want to sing it poorly just to say we sang it. Other choirs are "amateur working choirs" like church choirs which have to get pieces prepared on a tight timeline, and there just isn't enough time to polish a masterpiece every week. And, in those situations, sometimes it may really be true; half of the average church choir can't read music; they see the shape of the line, read the lyrics, and learn the exact pitches and rhythms by ear.
But, "if there is no struggle, there is no progress." - Frederick Douglass. You don't get better as a musician if you're not challenged musically. You have to push, otherwise you'll be stuck singing the same stuff over and over again until you get bored and quit. At the very least, if you can sing a Whitacre or Lauridsen piece, or something from the classical era like a Bach or Palestrina, even if you wouldn't put it in front of an audience (yet), when you go back to the level of music you had been doing normally, you find it very easy to pick up. Skill is gained, not discovered. So I say, put that challenging piece in front of the choir, and spend some time working on it even if you don't get it polished up just right for a performance. It'll pay off in other ways, and who knows? That group of non-music-readers may just surprise you.
Am I wrong? Is this the wrong way to think for the average case?