I don't agree with this. The way the laws are written is terribly unclear and the recent lawsuit that eliminated the registration requirement is a good indication that the regs are not at all settled right now. But currently the Special Rule for Model Aircraft is what is in effect. It does not lay down many specific rules, instead it requires that "The aircraft is operated in accordance with a community-based set of safety guidelines."
Clear as mud.
So basically the FAA has pushed the rule making off onto unnamed "community-based organizations." At least, now, the FAA has gotten together with two such organizations, AMA and AUVSI, and put together the Know Before You Fly website which lays out the AMA's rules which now include a 400 ft altitude limit.
So, in effect, the AMA's guidelines become law. It doesn't have to specifically be the AMA, but you have to be able to show that you are operating under guidelines from a national CBO. So at this point, unless you can find another CBO that the FAA will accept and has different rules, 400 feet is the limit. (As a side note, the AMA rules used to say 400 feet only within 3 miles of an airport. But now that they have teamed up with the FAA and published the KBUF site that has changed to a blanket 400 feet. So, obviously somebody thinks that number is important.)