We are in a school district that uses similar criteria for GT programming (95th percentile on any one of the sections of the test). Our school probably has 30% of the population that has been identified as gifted but not all are in GT classrooms. I believe that CoGat does over-identify especially at the lower grades. Once these kids get into the program, they seem to stay whether or not the placement is appropriate b/c the school doesn't want them to repeat curriculum, esp math. It sounds like your DD's class may have some of these kids.
That said, DD is in the 99.9th percentile based on various measures. I also think that many kids in her class are fairly high too. Since our school does service MG kids pretty well in the regular classrooms, I think that the GT classrooms end up catering to higher level kids. I think that this is particularly true for kids that move into the program in the later grades. For the older kids, I think the move seems to be based on a less than ideal experiences in the regular classroom. Fewer kids test at the later grades but I'm guessing that a higher percentage of those who test qualify (no data, just anecdotal observations).
Even though we have experienced benefits from early identification for our kids, I sometimes wish that the identification process were implemented later/differently.