I think our district has something similar going on. Just to note, there are different reading systems with letters. So there is "A-Z" and then there is Fountas and Pinnel, for example and an N in one would not be the same level as the other (an N in Fountas Pinnell is a higher level), (just to make it confusing for everyone). But I got a lot of the same type of story where the underlying logic seems to be that kids are simply not capable of understanding texts that are above grade level, and therefore it is harmful (somehow) to give those books to them. They may be able to decode, but they don't grasp the underlying themes, character motivations, etc. DD's 4th grade teacher last year gave her a level V (F&P) and DD went back to her and told her it was a babyish book, and teacher claimed that DD must not be fully grasping the book if she thinks it's too easy. I'm not sure where this logic is coming from--what sort of current educational philosophy is promoting this practice, but for gifted kids it's ridiculous and it doesn't take into account that gifted kids can be several years ahead of their age in terms of what they can comprehend.

Honestly I would be so ticked off I wouldn't be able to send my kid to a school/district that rigid and would be looking elsewhere. I suppose you could send a letter to the curriculum specialist or superintendent but I doubt you're going to get very far with the teachers, who are having this shoved down their throats (and probably most blindly accept it).