I totally sympathize with the very bland first readers. DD(3 - almost 4) struggled with this tremendously this past winter/spring. We have finally finally gotten to where she can read the Pinkalicious (and some Fancy Nancy) level 1 books. It has truly made a world of a difference having stories that she is interested in. She even wants to read them over & over which is not typically her personality.
Some of the early first readers that DD liked were from a little boutique bookstore. They were much more enjoyable than the super dry ones. Here is one book from the series:
http://www.amazon.com/Matt-Sid-We-Read-Phonics/dp/1601153163
