I learned to sight read, and have somehow limped along through grade school,high school and college, have a professional career and raise a literate family of college grads..
Maybe those “functional illiterates” have issues other than reading methods
http://www.youtube.com/watch?v=uWN9rTc08GU&feature=related
The truth is probably that there’s some small percentage of kids that don’t actually need to be “taught” to read at all, a good-sized group of more advanced kids that can start right off at sight-reading without the tedium of phonics, and then a larger group of kids that need to start with phonics to learn to read.
Unfortunately people on both sides turned supporting their form of reading instruction into some sort of politicized moralistic crusade.