My DS6 is in first grade and the first grades at his school regroup for reading instruction. This means he is with the top 5-6 kids in the grade level being instructed on a level between K-M. I have my masters in reading and taught kindergarten before having my kids. While I do think my son can read above a K-M level, he has learned a lot this year. He has learned how to write a composed paragraph, with an opening sentence, supporting details and conclusion. He has developed a much better understanding of conflict, resolution, understanding the author's message, learned how to cite the text to support his answers and inferencing skills. Now that his writing is coming along, I am getting ready to go to his teachers and say, "I see he is currently being instructed on level ___. At home I see him reading more difficult texts with solid oral comprehension. Can you tell me what skills he needs to master before moving to the next level of text?"
I had kindergarteners who could read Harry Potter, but couldn't write 2 sentences about the main character. (Which of course is fine for kindergarten, but no the child should not go to 4th grade for reading!) Or when asked about the "setting", they were not familiar with the vocabulary we teach at the more basic reading levels to answer the question. An advanced reader I would expect to move quickly through these skills, but not necessarily skip them.