I know you are talking about higher levels, but I am currently experiencing frustration with this with my DD's preschool. They are giving her level C readers, where she does encounter an occasional word she hasn't read before and needs to sound out. But at home she reads level J, talks about it, asks questions, and also encounters the occasional word she needs to sound out. DD(4y 1mo) doesn't like the repetitive nature of the level C readers but when they see she gets "tired" (AKA bored) and stumbles on one word, they assume it is her level. I just wrote a very heated email to her teacher (now regretting it) trying to explain this. But I just get so frustrated with having to go through this at every school (we just moved in January).