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.
He also is given homework assignments every night, mostly math, except for Friday. He gets the weekend off. ;~))
BTW. He loves school and loves his teacher. It shows that public schools can do it, if they want to.