To piggy back on Harolds' wise words, I also see a growing need for early chapter books for older struggling readers. In schools, it used to be that the high-flying blue birds read from one reader (basal textbook with several stories) while the slower red robins (or whatever) read from another. The basals all looked very similar from the outside, so there was no shame in carrying around one or the other (although kids knew anyway whch group was the high group and which was the low).
With the elimination of basal readers, schools now use book sets for reading groups. And as an ESL teacher of upper grade elementary students, I can tell you that the cover and format of the book go a LONG way in getting kids to either read a book out in the open or shove it to the backs of their desks.
We've also drastically cut the use of Science and Social Studies text books at the elementary school level. You no longer hear a teacher say, "Okay class, open your books to page 64," because not everyone can read what's on page 64 (or any other page, for that matter). I love it when I find a NF book that looks like it's for older kids, but has text that my lower readers can read. National Geographic Kids has three versions of each issue for 3 reading levels, and they all "look like" grade-level magazines.
In fact, when giving the alternative state standards assessment in my state (Virginia) to ESL and Special Ed. kids, one requirement is that we use what's called "respectful text." For example, if the standard is distinguishing one genre from the other, we can't give a story about a talking bear who loses his first tooth to a 5th grader, even thought that story might be on his reading level. Henry and Mudge, however, tends to be fine--Henry could be 6 or he could be 10, and kids love Mudge's antics. Same with Nate the Great.
Good discussion--thanks, everyone!