A system and method of operation of a data storage system includes: a memory die for determining a middle read threshold; a control unit, coupled to the memory die, for calculating a lower read threshold and an upper read threshold based on the middle read threshold and a memory element age; and a memory interface, coupled to the memory die, for reading a memory page of the memory die using the lower read threshold, the middle read threshold, or the upper read threshold for compensating for a charge variation.