Up late and knackered so apologies if not too clear but here goes. You could be describing my DS. He is in year one but a level 2C for reading (last term) perhaps higher now and on the bottom table. Our 'groups' have been static pretty much all year (perhaps 3 movements maximum all year).
Our teacher talks about those who are average, those who are bright etc and it seems the children are living up to expectations. I heard last week that the top table now go into year 2 for various things, including reading. They thus pull further and further away from the others, the potential positive outliers of the future are being created.
Thing is DS, whilst no genius, would also be pulling much further ahead in reading etc if he had such seemingly dedicated extra attention.
I think a lot of the misunderstanding and frustration would be solved by more transparency in the classroom. It seems different teachers have different policies about 'ability groupings' and yes, some seem to thing that fairly static tables are a good idea. There's no differentiation, for us in year 1, between ability at maths or english, children are generally 'fast' or 'slow' or somewhere inbetween and we can't change that. Our teacher also comes under huge pressure from parents who don't want their children moved down from the 'top' tables. I don't blame them. This said there is the odd child that has made a huge leap forward and is moved, but this is extremely rare, and happens when the change is so enormous the teacher has to move the child.
OP - are your ability groupings always of a equal number like ours?
Many parents don't worry about it at all in our classroom but I personally believe it can be very damaging and mean that children will not believe in themselves even much later on in the school system. Teachers, does this system make things easier? Why do some primary teachers seem to favour it? In our school it seems to be left up to individual teachers to have their own 'system' in this respect.