Several high school teachers I know don't assign long reading sessions because their students are dealing with some kind of unstable home life (or are homeless) and don't have an appropriate setting for it outside of class. That is, they avoid it because it injects a class bias into their grades.
Given that, making space within the school day for such things seems like a good idea.
It's not so much about competition between the students as it is about competition between the schools.
If your curriculum puts economically disadvantaged students at an academic disadvantage, and your school has many of such students, then your school ends up with less funding because your students do poorly on tests compared with the well off schools. So if you want to help the students you've got, you come up with curriculum that doesn't penalize them for having jobs, kids, or other outside-of-class reasons that they can't sit down and read at length.
Given that, making space within the school day for such things seems like a good idea.