The FAA and congress have repeatedly made it clear that a "Model Airplane" can not legally fly above 400' agl anywhere in the USA. The fact that it is unenforceable does not make it invalid. Get spotted by a full scale airplane at 1000' and get caught, then see what happens.

It is interesting that FAA is proposing that a commercial UAS under 55 pounds can fly up to 500' where flight is not prohibited.