As far as schools "underestimating" the child's abilities, I think part of it is due to the lack of interest and perceived relevance on the part of educators. For example, it doesn't matter that your first grader can read Harry Potter for fun since he isn't likely able to compose analytic answers to literary questions required at the 5th grade reading/language arts classes.
I agree with this. I'm not sure it's lack of interest on the part of teachers, but more a lack of:
1. awareness - this is a good theory, and one you're supposed to learn in college or grad school, but one that is often difficult to put in place for each individual child
and 2. a lack of resources (time, ability, classroom structure) to be able to take this from theory to practice.
I sound like I am trying to defend educators and I'm really not (though I am one)- I'm just making these points to show (once again) that the way the current PS system is set up (and many private schools) doesn't work! Esp. for g/t kids.