I wonder sometimes if there is a bit of a geographic/school-district dependence relation that impacts reading levels - Magic Tree House books are definitely 2nd grade level here and many kids are reading them by the end of first (not talking gifted classes either). By third grade very few students in the classes I've helped out in were interested in them anymore -
I've noticed two things on reading levels:
1) in the elementary reading levels, the 'level' of the book is almost always at least one grade harder than the 'interest' level - and often up to three grades higher. This doesn't seem to be dependent on the scale used.
2) teachers and reading scales seem to assume that remembering the sentence you've read all the way until you have decoded the end of it, so you can make sense of it, is a major determinant of reading level. This is why using lots of sentence fragments (in MTH or elsewhere) lowers the reading level dramatically: the meaning is somewhat pre-digested. I have to believe this is true for many kids or it wouldn't be such a universal belief.
My younger one can decode an entire paragraph syllable by syllable and then just remember it all to make sense of it. For her, the ideal rating scale would include a LOT of vocabulary, some phonics/decodability measures, and clause complexity, but not sentence length.
