Existing ply siding? Dunno. Depends how it was installed and how the windows were installed. If windows were set right to framing then plywood I can see why the guy proposing Hardi wants to do the same. Resetting the windows could be a lot of work. How old are the windows? Maybe this is a good time to replace the windows. Unfortunately this will effect trim and jambs inside. It may be possible to extend the jambs outside but I cant say for sure.