I was already reading in kindergarten before I encountered the formal phonics instruction in 2nd grade. My kindergarten teacher in Hawaii had successfully slipped phonics under the radar. That training served me well in Welsh as well. The key problem is that I can read Welsh aloud and be perfectly understood, but I may not comprehend what I just read. I think the same applies in English. Decoding the written word into properly spoken language is only a part of the process. Understanding the meaning of the word alone and in context is another level. Syntax, semantics and idioms often go right over the head of a student.
I understand your frustration with seeing all the money schools spend on the trappings and comforts while failing to address real academic achievement.
Very interesting. I agree that decoding is only part of the process, but as soon as a child can decode he can read to the extent of his spoken command of the language. In any event, without facility in decoding you never get to the next levels.