Here's an ED Hirsch article which points out that children's ability to learn and expand their vocabularies precedes their ability to decode letters and words. If you want to establish a child's vocabulary at a young age, then you need to teach content: knowledge, science, history, art, and facts, in a parallel stream to teaching them decoding (like phonics) and encoding (writing and spelling.) The mechanics of reading for a young child make it harder to grasp the content of what they're reading--the mind is so busy puzzling out the sounds and the words that it has little left for understanding. Teaching content through out-loud reading can get kids the vocabulary and the knowledge they need to really be able to read.
Why Is There So Much Listening in the Core Knowledge’s Reading Program? « The Core Knowledge Blog