I have a grandson in 2nd grade and I am impressed with both his reading and math skills. The school district he is in primarily stresses reading skills in the early grades and uses a combination of phonics and what they call "sight words" -- those that do not easily sound out -- to get the kids quickly into reading and making it enjoyable for them. Even his math homework includes word problems to reinforce the reading. The kid enjoys reading and does it on his own for fun.
I'd have to say that my grandson has advanced faster in reading than I did at his age in a parochial school where the nuns taught strictly by the old methods. Whatever this school district is doing seems to work.
Some children have a natural gift for reading, just as some do for music, sports, etc. I refer to kids like this as having language-friendly minds. They can learn to read with little or no instruction.
Sight reading (the base of whole language) is a problem, in varying degrees, for about 70% of children. Of this 70%, about 40% struggle through, and many will wind up functioning at an acceptable level. None remain purely sight readers, as this cannot be done. They have managed to implicitly pick up spelling patterns and how they work. Most kids need explicit instruction rather than hoping they just figure it out if they see it often enough.
The children I tutor are, of course, in the 30% group who do not have the language-friendly minds. Their little lives completely turn around when someone actually instructs them and they see that they are not stupid after all. A new lease on life...even at such a young age!
Either your grandson received more phonetic teaching than most children, or he has one of those language-friendly minds...or a bit of both. In any case, it is a good thing, and I applaud the school for teaching phonetics.