The only flight stayed so low and was for such a short time because it was totally unauthorised for the exercise, which was a taxi trial. When the chief designer later asked Hughes whether he actually meant to lift it off the water, Hughes replied, "You'll never know." It is generally thought he did it deliberately just to prove it could fly to the critics, but with an excuse where he could deny it was deliberate.
Could it have flown out of ground effect? Undoubtedly, whilst it is said to have been underpowered, if it had the thrust to break the water suction and get airborne it undoubtedly had the power to climb well out of ground effect, particularly without a cargo payload onboard, and probably get close to its planned ceiling of around 29,000ft.
But even true WIG aircraft can operate out of ground effect, the
Ekranoplan had a ceiling of over 24,000ft. They are just not very efficient out of their design envelope.