Rule #2 under 336 "kinda" says differently. I hate how vauge these rules are sometimes.
"(2) the aircraft is operated in accordance with a community-
based set of safety guidelines and within the programming
of a nationwide community-based organization"
I think it is generally accepted that the FAA is referring to the AMA, and that is where the 400 ft. "rule" comes from. Again, it's quite vauge and nowhere in the law does it directly mention a height limit. Also on the FAA's own website it calls things "drone safety tips" which doesn't clarify anything either.
That said, I'll be sticking with a 400 ft. ceiling, but won't bash anyone who goes above it.