Education, Killing My Child's Love for Learning

I know that I'm not educated beyond high school, so I probably won't get taken too seriously, but I have to vent. Like many parents out there I'm frustrated with the school system. I struggle watching my kids do school work and homework that doesn't challenge them. I truly appreciate that their teachers attempt to do a little extra here and there for them, but I'm dying for a better solution. Sure there are charter schools, we could do that, but I'm not ready for a 30 minute commute twice a day for an education that I can't be quite positive is better than the one my kids are already getting.
My kids are smart, they are both above grade level in reading and math (WOO HOO). We have worked really hard to get them where they are, but at parent teacher conferences I was sad to hear that all of our hard work may have really just made a negative impact on things. They won't let Hailey go beyond anything at a 3rd grade level. She is being forced to stay inside the box that the school has deemed appropriate for her age. She is not encouraged to go beyond and is often done with her work at school and then just has to read...Why not challenge her? I'm sure there is a way to do it, be it some extra math practice, ask her to make a book report, or something, just challenge my child before she starts to hate learning.
I get that the teachers can only do so much and that the curriculum is preplanned etc, etc. but a bored child won't want to come to school, they won't want to continue learning if all they are doing is sitting there while everyone else works. I know that everyone has their own problems with the school system and this is mine. I find that we cater to those who are on par for grade level and those who struggle, but what about the ones who excel? Why are we dimming their light, why aren't we letting them shine?
I want to fix things, but honestly I wouldn't know where to start. And well my husband, who is amazing and wonderful and who always has ideas about how to improve things at work and at home, tells me that this can't be fixed and that every time someone tries to fix it, it ends up worse. So I'm stuck and lost, where do I start?
For now I'm starting at home, the school won't test Hailey's reading past a level O, which is the 3rd grade level, so I honestly don't know where she's at, but we are starting to work there and will advance as she improves. As for math I'll keep challenging her here, so they can hold her back there.
I would truly welcome and appreciate any advice, comments, etc. because I'm drowning in disbelief that we can't do better for our children, that we can't provide our kids a place to learn, and love learning at the level their at.
If you read this rant, thank you, I appreciate your time.