First, Laurie A: heartily agree with every word!
I love your approach of letting your child do what is engaging and interesting to them. At bedtime, even more so. Have you considered reading a story to her first? I do hear quite a lot about kids 'missing' having a reading time when their parents read to them. Those are also prime moments to introduce books that have a higher vocabulary level than the easy readers, etc. (My sister homeschools her three boys, ages 7,10 and nearly 12 and she reads something aloud to them for about 45 minutes each day as part of school. They love it.) At night, we read from an advanced chapter book for 20-30 minutes for our son, then he has 30-60 minutes (depending on school the next day) to stay up and look quietly at books. He loves this arrangement.
Before bed should be a time when she can choose something more relaxing. Perhaps 'longer' books have more text on the page, so it would actually be the equivalent of what she's getting in one Easy Reader. Perhaps there is so much text out of context (and think, books like Paddington Bear and others use colloquialisms we don't use in our common vernacular today--but still a great book), so many unfamiliar words that it is a struggle.
If you are seeing this during the day time (the very short time with books), ask her how her eyes feel. Watch for her rubbing one or the other of her eyes, excessive head tilt... my son was diagnosed with some 'eye function' issues this summer (ocular motor dysfunction and convergence insufficiency, mostly). He is in kindergarten and when he has to search his early reader for sight words to highlight, his eyes get fatigued easily. This isn't due to laziness, either-- we are working with an eye therapist and he does eye exercises every day. What we have found will help him is to have him work for 5 minutes or so on more intense work and then have him take a little break, usually to do something more gross motor/physical. He needs this; much as we wouldn't do a full workout without a few breaks to catch our breath. It's actually on his 504 plan that kids with his eye issues are very easily fatigued and NOT to confuse it with laziness. I see this when he's rubbing his eyes a lot, he'll actually cover up one eye to 'suppress' the image from it, so it's easier on his brain.
So, all that to say, yes, it may be that she needs to build up some reading 'endurance'. However, if you feel that she is displaying some of what I described, you can talk to your pediatrician and get a referral for an ophthalmologist to do a functional eye exam. (My son's med insurance does cover part of his eye therapy, once we blew through the deductible.)
Keep reading aloud what's engaging for both of you together, and I'd also suggest offering opportunities for her to write whenever possible. Thank you letters, notes to the friends/neighbors she likes, grocery lists, etc. I think the writing part sort of further 'cements' what she's learned through reading. And really, at bedtime.... I wouldn't worry too much. It's supposed to be a relaxing time... and you are a good mom for working like this.
And after reading your SWH: I agree with you philosophically in 'how kids learn'; I told my husband that if the local neighborhood school didn't work out, we'd homeschool too. (I'm a preschool teacher on hiatus, and I've been writing my own emergent curriculum lesson plans for years, so this was not a big jump for me.) If your girl is reading at this level at five, I wouldn't worry about it. My son is the same age and has about 5 or 6 sight words under his belt. I'm not worried, either. :)