Is your light meter obscured in any way? By your case, for instance?
If not, test by going into medium light and covering the light meter. You should see brightening as long as your Auto-Brightness is set to on in Settings > Brightness & Wallpaper.
The auto-brightening is limited, in my experience with four iPads. I find it doesn't brighten by much, and I'm better off manually adjusting.
There's an app (at least in the U.S. app store) called Dimmer that's handy. (It has limits, too, but I found it for free.) I also use a shortcut set to my home screen to adjust brightness. (It came via a free bookmarklet available elsewhere online for free.)
