I'm confused by the parents who say that they would never punish a child for reading. I don't think that this is a case of punishing for reading - it's a case of punishment for ignoring the rules (and as a side note, we never use the word punishment... it's a consequence, brought on by the child - and frankly, in our case, it was never physical and was usually just taking away the means and having to endure a "we're disappointed" chat with us :)).
I don't think you can kill the love of reading. Dd20 got in trouble quite a few times for reading-related offenses: not returning books to teachers, reading past bedtime, reading in math class, etc... At 20, she's out of college (with a degree in literature), still reads voraciously, and is a member of Teach for America's current corps - sharing her love of reading as an interventionist at a high-poverty school.
We built in reading time every night for all four of our kids. We had the same bedtime every day of the year. If we were out late on a weekend (not common) we'd give then 10 minutes to wind down instead of the 30 minutes that was normal.
Our dss13 and 11 still go to bed at 8pm and read til 8:30. Three or four days a week, they are up before 6 for early-morning activities. Yes, it's early to bed, but they need it. Obviously, when there are sleepovers, school events, etc...(or just a lot of homework) that changes, but even at this age, they really do need their sleep.
Two of our kids are great sleepers and two are not so great. Dd23 struggled in HS and college with sleep issues, but she is now graduated, gainfully employed, and although she'll never be the best sleeper, she has thanked us many times for being so structured. I am a terrible sleeper and had no bedtimes growing up. I really wish I had (my self-discipline on putting a book down is TERRIBLE). For our youngest, who is the other bad sleeper, we have really worked with him on keeping the room cool, using sleep music, sitting with him if he needs it, etc... but I don't think that the answer is reading til exhaustion forces you to stop (in my case, 2am, even if I have to get up at 5:30).
Our dd20 is a teacher at a school that starts at 7:20 am, and she is dismayed on a daily basis to see how many kids are just too tired to learn.
You make some great points, Momtofour.
