It was a nice feature that was useful, especially if you spot a story you read ages ago and the title doesn't ring a bell.
The trouble is that it takes up a fair amount of of space to store a link about every story you've read.
Also, what do you mean by 'read'? If you mean 'page you visited' - which is the browser's definition of "already read" - then how does the system know you've not just clicked on the page by mistake? Or clicked to read it, didn't have time to finish it and intend to come back later? You could see a 'read' indicator and think you've already finished it.
Lush could use the act of Liking or Favouriting or commenting as an indicator. But if you don't interact with the story in that way - perhaps you didn't like it - then you would still like to know you've looked at it so you don't try and read it again and be disappointed a second time.
Or, since stories are auto added to your Reading Queue from friends and followees, the act of removing it from the reading queue could be the trigger. But if an author isn't on your friends list and you stumble across one you read, that wouldn't help leave a trail.
So, it really depends on how we define "I have read this".