I have been tracking DS's reading level almost since he started reading. Why? Partly curiosity, to see how he compared to "average" -- not for judgment, but just to see where his strengths lie. If I know he's a "gifted" reader I'll encourage that side of his development. If I know he's a "struggling" reader then I'll relax and not push things but find ways to gently help, perhaps.
I've also used it to track his progress... to see when he's gone through reading plateaus, when he's jumped levels, etc. Again a lot of it is just curiosity, but it's also helpful in seeing how his overall development is progressing.
It's also helpful in finding appropriate reading material. If he's 7 but reading at a 9yo level, I know I can get a "4th grade" book and it won't be beyond him (at least in difficulty, though not always in content!)
I've used the Schonell reading test, which is quick and easy and he gets a kick out of doing it, every 4 months or so, and he's excited when he realizes one of the words he previously couldn't figure out, he now knows.
It doesn't give "grade level" but gives "reading age".
I certainly wouldn't obsess about it. And despite my description, I actually don't lol... But I do find it a useful tool.