Students should be exposed to both factual (non-fiction) and fiction books. There are different reading strategies that are important for both kinds of books.
I do think that you have to consider the students interests in suggesting books. For example, I have a second grader that would only ever choose non-fiction, or expository books about animals. I really wanted him to learn about story structure, setting and charter development. My thought was to look for books that may have an animal as an important character in the story, so he could use his background knowledge to help him understand the story line. At first, be “balked” a bit at my suggestions, but when I showed him how to use his knowledge to understand the characters, he got “hooked”.
An example of a great book for this kind of connection is The Chick and the Duckling retold by Mira Ginsburg. It’s a “cute” little story about friends who learn they don’t always have to do what their friends do. Underneath the story, however, there are so many suggested similarities and differences between the two animals that you can weave a lot of science into the story,
Another reason kids need both types of books is that they will be exposed to both kinds of text as they advance in school. learning about non-fiction structures will help them when they get into textbooks. Reading a textbook is very different from reading a fiction story.
Of course, the ever-present testing of our reader will present them with both types as well.