Honestly, my experience is that it all boils down to money.
My state has some loose (very loose) guidelines in that each school system gets to set their own bar for giftedness. There is no rubric that everyone uses. They can use whichever tests they want (poor district will cheap out and not do extensive testing that costs them money) and richer districts with populations that might be chock full of engineers will have a higher bar for test scores because of limited space in a classroom.
We literally moved from one district that had an 85% score on a Stanford test that only offered pull-outs to one that had a 96% requirement that has a TAG teaching team. The other school just didn't have the money. And VA does provide some state funding for gifted programs along with other funding they provide that's earmarked for certain things (like textbooks, for example).
Identifying gifted kids earlier than 3rd grade increases the costs. It's easier for schools to pretend they don't exist or need special services.
By the way, I did find an Otis-Lennon that was done by that school on my now 14 year old in Kindergarten. Off the charts! But, they did not offer services til 3rd grade and they say they tested her again then and she did not get identified (but could not provide me a copy of those tests). She eventually got identified much later in 7th grade after we pushed. But in all honesty, they would not have done much, if anything, for her in elementary anyway.
I don't know why schools don't at least ability group at the very least. Meet everyone where they are and allow them to move around as necessary.
Some schools do ability group in early elementary to try and make up for this fact. Or at least they did when my kids were in elementary. This is mostly to benefit the struggling students. In the early grades (K-2nd) the kids were grouped in reading & math groups where they received smaller group attention. What this generally meant was the most advanced group would get some "enrichment" work while the struggling kids got extra time with the teacher. Sometimes a parent volunteer would work with the advanced kids. But the advanced students were still supposed to finish the regular work it was just assumed they would do so quickly. And the enrichment work wasn't the same as working a grade or two ahead.
Our district while it has no formal gifted program till 4th grade when my DS was in early elementary did offer gifted clusters. It even stated this on the districts gifted students page. There was no formal testing for these clusters and this group was more highly performing cluster than gifted per say.
