Now I thought that the reason behind all this is that the original Biff & Chip books pre-date phonics as tool taught to children to help them read. They go back to earlier days when look & say and sight words were used more commonly. When everyone started to teach phonics, there were books which were previously considered easy (because they didn't have many words in them and were quite repetitive) which are now considered to be comparatively harder because they contain words which contain phonemes that children won't yet have learnt, so they can't use their phonic knowledge to decode them.
Obviously schools had spent a lot of money on the old ORT books and ORT, being good suppliers who didn't want to upset schools, produced the list linked above which re-organised the books into book bands so that they could more closely reflect the order in which children now learn sounds.
as tobysmum says, it isn't an exact science. Schools don't have to follow the book banding scheme and they can organise their reading books however they want to. The new primary curriculum makes it clear that phonics should be the only method used to teach children to read. However, few schools can afford to throw away all their old home reading books and buy completely new ones. So in my experience, most have taken a fairly pragmatic approach and used resources like the list from ORT to re-organise/re-band their books to make them fit a scheme they weren't originally designed for.
For some books this isn't a problem. For other books, it isn't great but it's close enough to justify it when the budget is tight. And for other books, the only place suitable for them is the bin, in my opinion.
Floppy the Hero is a good example of this. Originally a stage 2 book with 1 simple sentence on each page. Trouble is, it refers through out to the fire engine in the pictures. If a child had been taught to use clues from the pictures (as they used to be) then that wasn't a problem. But the new curriculum specifically prohibits this as it detracts from the children using their phonic knowledge. Fire and engine are not decodable until the children are well into phase 5 phonics ie a lot further on than blue band, which is where ORT now place the book. I would also expect a blue level book to have more than 1 simple sentence per page, so it's both too hard and too easy at the same time!
So I'm afraid it comes back to the old chestnut of scarce resources and schools having to make the best use they can of the limited money they have. In my school, all the reading books were re-banded using guides produced by ORT and the other publishers (we have home reading books from a wide range of publishers/schemes). Gradually I am spending a couple of hundred pounds a year so I can replace the outdated books over time. Each year when I get a new batch of books in I can take out the worst of the old ones. But if I threw out all non-phonic books, I simply wouldn't have enough for the children to be able to change their books each day.
Incidentally, the guided reading books we use in school are all fully phonic, so when children are being actively taught, the resources are up to date. It's just the quantity of home reading books we need can't all be replaced in one go. If anyone would like to give me a couple of grand....