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I have no idea what NFHS rules say about this, I can only chime in from a FIBA basketball perspective:
Under FIBA rules a correctable error can be corrected as long as it's discovered "before the ball becomes live following the first dead ball after the game clock has started following the error." (i.e. when the ball is at the disposal of the green FT-shooter). If by "ready to shoot" you mean the kid already had the ball at his/her disposal, you were right, it was too late and the call couldn't be reversed anymore.
If he was just standing ready at the FT-line and did not yet have the ball, the call could still be reversed. In this case the orange kid that fouled out would have to remain on the bench and his substitute would have to shoot the free throws.
Again: this is based on FIBA rules and FIBA does not have a 1-and-1 rule, however any erroneously awarded or denied free throws fall under the correctable error category.
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Dutch basketball ref
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