I can't speak to kids' psychological states, but we know the students in affluent neighborhoods who attend well-funded public and private schools perform as well as or better than comparable students in other nations on various academic assessments that require reading aptitude. As with most social institutions of our society, the educational system is excellent for the upper middle and upper classes. It sucks for the poor.
I recognize I'm highjacking Doug's topic, but I really think it's more helpful to ask "How can we break down our educational apartheid sytem?" than to ask "Why don't kids read?"
Miles