I understand the allure of the simple answer, but "Trade schools are good enough, we need more plumbers anyhow!" only works until Joe the Plumber has to sign a contract, read a EULA, or steer the fate of our entire nation by voting.
Reading isn’t just about successfully understanding words. It’s the ability to decipher context, particularly in long texts in which metaphor and subtext are important.
You need look no further than the current crop of VCs and tech leaders who can all clearly barely read. Andreessen, Musk, Zuckerberg all love to point at classic science fiction and modern media while making comments which articulate how completely they have missed the point. When musk says the Cybertruck is “…something Blade Runner would drive” or Andreessen quotes Marinetti as a hero, or Zuckerberg unironically uses “move fast and break things” as a motto it’s clear how little of what they have read they understand.
People today are praising translations of Hitler’s speeches. They do this because they cannot connect the points he’s making to the inevitable outcomes of those attitudes. They lack the ability to see into the text and truly understand it.
That’s why a 3rd grade reading ability is a problem. Zuckerberg and Musk are dropouts. It’s shows.
I have a 4th grade child. When she was in 3rd grade, I realized that a 3rd grade education allows you to function in many different forms. A 3rd grade reading level is more than enough for living in nearly every situation.
I would hope that full grown adults develop other "intellect" skills that help them in life, but as far as reading level - 3rd grade is plenty.