I think one mistake we make is assuming that reading grows at a nice continual ramp. What I have seen with my kids is much more like a step function. They do level off or plateau, until they suddenly jump.
Now is that real leveling? No. They are definitely absorbing a ton at that level before the next leap.
My oldest went into K reading at about a 3rd to 4th grade level. She stayed there for quite a while, and really only went up a bit. During the summer between 1rst and second grade she leaped to a 7th grade level.
My other child was reading at a 2nd grade level at 4, and was reading at a 3rd grade level by K. She leveled off there, and went on a chapter book strike for a year. The summer between K and 1rst grade, she made the next step in her step function, and was reading at a minimum of a md 5th grade level.
I think when we have kids that grow in more a step function fashion, we think when they are at the bottom of the cliff, that they are not doing anything. They are. They are absorbing a ton, until they suddenly leap a few grade levels.
I would not be surprised if your daughter's reading level makes a jump to 6th-7th grade at some point.
