After hearing the Sisters talk about this subject several times, I believe they would say that perhaps you are limiting their choices by having many of your classroom library tubs organized by levels.
Joan tells the story of a child in her class who wouldn't choose books from the public library because there were no "blue tubs". Yes, when we are conferring with our kids, we will give them good fit book according to levels. However, remember, those "3 ways to read a book"--by the pictures, retelling and reading the words.
So, you'll provide them the books where they can read the words, and your library should offer those books that they've heard before (to retell) and books they can read by the pictures. It sounds like you have some of that going on, but perhaps take a look at "leveled tubs", to encourage more choice or interest.
Here's a link to a video of Joan talking about classroom libraries:
http://www.thedailycafe.com/articles/efficient-assessment-area
Here's an article about classroom libraries: http://www.thedailycafe.com/articles/your-classroom-library