Can anyone tell me why the redbook does not go higher than MS-65 in most cases? I'm sure there is a simple reason, but I don't know it.
You should be glad it goes that far. Years ago the Red Book listed "Unc." coins. That's it - Uncirculated. Period.
Because premium gem status coins for any series of classic coins are extremely rare. Most people don't own premium gem coins, hence there is no reason to list the price. In addition, the collectors that do own premium gems know where to find the pricing information, and it is not from the Redbook.
Auction Archives, Greysheet, and price guides such as Numismedia & PCGS. The Redbook prices are dated by the time the book goes to print.