I homeschool my daughter. She loves to read and has been since she was three. She just turned six, which means I would be placing her in 1st grade this fall, if she went to public school. She is currently reading Knight at Dawn of the Magic Tree House Series by Mary Pope Osborne; this is a 3rd grade level book. I believe, unless there is a question about the subject matter, that children should read whatever books they are able to read, especially when reading for their own pleasure. If the book is a bit advanced for them but they want to read it. . . well, what better incentive is there than that!
It is amazing the difference in readers from the 1800's and early 1900's. For instance, the primer of the Elson Readers was about the same level as the mid 1st grade level of the Pathway Readers, which were published for Amish and Mennonite schools. They are considered by many to be advanced when compared to readers in public schools today. My grandfather had to quit school after 8th grade, but he could read at college level and never stopped learning. There is just such a big difference in what child where expected to be able to read a century ago compared with today.
There is a really cool site that not only gives you the grade level of many books, but children can also win points towards a prize after taking a quiz. It is much like the Accelerated Reader program in schools, only it is free and available to everyone. http://bookadventure.com/
I am currently in the midst of three books, one for pure pleasure, one for religious insight, and another about homeschooling. For pleasure, I like historical novels like those by Sharon Kay Penman and, completely on the other side of the spectrum, I also enjoy well written sci-fi books, but I tend to read more non-fiction than fiction typically. Dallas Willard and Max Lucado are my favored authors for religious books at this time.