When at school my DS6 reads whatever the assignment is. Because he is in a differentiated program, his current reading class is about 3rd grade. The teacher is moving him up, but oh so slowly. Like you I was frustrated until I talked to him. He's perfectly ok with it as long as he can read what he wants at home.
In addition I spoke to the head of the gifted program and she called it reassurance reading. She said that often times, these kids need something in their day that they can do easily. Everyone is always worried that they are being challenged but sometimes they need to be able to show mastery. He goes to the school library and have noticed that he is just as likely to come home with a 1st grade book as a 6th grade book and library time is free choice. So maybe there is something to it.
