If you're confident that you'll make an A this time around, you should stay in the class. If not, I'd drop it and maybe take another course that requires physics I material and do well in it to show that you really understood the material. I got a C for Ochem II the first time, and I was horrified at first, but did well in upper division chem classes that required the material. I was pretty confident that I would do well if I took it again, so I did, and got an A. I think getting anything other than an A is not worth retaking.