RT not sure if that is addressed to me, but anyhow.
Our school is very pleased when children read better, and encourage progress, and do teach them. They just want to keep them on lower home reading books. My DS is now in Y2, and last year they were a bit more flexible in Y1 than they are now, but still we were told explicitly that whereas he'd be able to read higher level books, they didn't want him to, for the sole reason that those other books were meant for Y2 and if he'd read them in Y1 already, he'd run out of age-appropriate reading material.
My DS enjoyed the Songbirds books too and never did mind the Biff Chip and Kipper books, although I did (they insidiously encourage guessing, especially up to orange level). At that time his books were pretty well matched to his abilities. In Y1 DS had a couple of big cognitive leaps and his reading developed very rapidly, but school books didn't change, and it was then that they became boring and a chore. Reading turquoise, purple, gold books - they are just long enough to be able to bore you. DS was not yet reading for pleasure at home, and with those books he was never going to. Being unwilling, a book that could be read in 10 minutes would take him 20 at least, and then he much preferred to go run about or play with his Lego or have me read him something, rather than pick up another book. 20 minutes 5x/week does add up.
Now that he is reading voraciously for pleasure at home, books of his own choosing, the mismatch between ability and school reading books no longer matters much. He'll whizz through his now white books in a few minutes and then go on to read something else. We use the school books for practising all the skills involved in reading out loud, and that's fine. The stories so far have been ok too. If I read out the blurb, DS will happily sit down to discover what it is all about.
I think the point where mis-matched books are a problem is mainly where a child has the ability to read but doesn't like to, is reluctant. At that point IMO it can be detrimental to make them read things they find boring every day. It certainly won't encourage their love for reading, even if they do whizz through the books in minutes.