Readynas trigger drive as Dead but CrystalDisk shows disk in good health?

Ya, don't format the drive. Put it back in the PC and unformat it.  You don't want anything on it in any way.  It needs to be like you would get a new HDD.  

There is a program called SpinRite from GRC.com which can check HDD.  Even repair issues.  The larger the HDD the longer it takes and it can take a long time.  But it'll go through and check everything, and if there's a bad sector, get it marked bad.    It's not cheap software.  It works low level on the HDD, so it doesn't matter what data is on it, or no data on it.  Even unformated.  If you've had 2 bad WD Red drives showing up as BAD?!?!    I have 4 WD RED 3TB drives, and a couple of them are now over 5 years old and show ZERO errors.  I also have 2 Seagate 3TB NAS drives in it, a couple years newer and 1 shows 1 error.    I have reasons, I believe, enough that I will never again get a Seagate NAS drive or any Seagate drive for that matter to trust my Data on.  But the WD Red's have been great. Isn't Crystal Disc more of a HDD speed testing software?

I wouldn't trust what that program says.  I would use WD own HDD testing software!!!  

https://support.wdc.com/downloads.aspx?p=3

See what that has to say about your WD HDD(s).   But when you put a HDD into the NAS, you want to make sure you wipe everything from it.  If it thinks there's Data on it, like you formatted it, it won't use that HDD!!!    Also remember, the NAS is using LINUX.   It's not running Windows.  It's not going to be using Windows NTFS.  In fact, the newerReadyNAS units use  a Linux file system called Btrfs.

https://en.wikipedia.org/wiki/Btrfs

If it's not like a brand new, untouched HDD, the NAS will ignore the HDD.  Mount the HDD in Windows.  Go into Disk Managment,  For Windows 10, right click on the windows icon on the bottom left of the screen, and click on Disc Managment.  Find the correct HDD.  For sure, it's NOT your C: drive!!  You're going to right click on the HDD you want and then Delete Volume.   Don't format it at after doing that!!!  Pull it from the computer and then put it in the NAS.  But check the HDD first using WD own software for their drives.   I don't know how this software works.  If it needs to be Windows formatted for it to see it?  If so, ok, but then Delete Volume after if it passes.   They do have a 3 to 5-year warranty.    The normal WD RED's are 3 years, the Pro versions are 5 years.  They are going to expect you to use their software to know if it's actually bad or not.