We have a low testing ceiling too. I've never had a teacher care if my daughter did the little bookbag reading though. I think that they just don't have time to focus on kids once they hit the benchmark ceiling for the year. The K teacher pretty much ignored my daughter. The first grade teacher picked out books I thought were very thoughtful. They didn't challenge her much, but they were good reads.
Are you sure that they demand that you read their material 30 minutes a day? Our school really doesn't care what mine reads, so she reads what she wants. The bigger problem I have found is making sure she's developing as a reader. We read challenging books together at night and talk about them. She reads what she wants during the day--sometimes challenging stuff, sometimes not. We recently realized she doesn't particularly understand phonics and I've started working on that with her at home--not sure why it matters, but we're making sure she knows it. It doesn't take much.
I guess I've just found that when you have a significantly above grade level reader, they don't have time to really pay that much attention to them. I think they're better off if you work on their reading at home.
