In many balanced literacy classrooms, children are taught phonics and the cueing system. Some kids who are taught both approaches realize pretty quickly that sounding out a word is the most efficient and reliable way to know what it is. Those kids tend to have an easier time understanding the ways that sounds and letters relate. They'll drop the cueing strategies and begin building that big bank of instantly known words that is so necessary for skilled reading.
But some children will skip the sounding out if they're taught they have other options. Phonics is challenging for many kids. The cueing strategies seem quicker and easier at first. And by using context and memorizing a bunch of words, many children can look like good readers — until they get to about third grade, when their books begin to have more words, longer words, and fewer pictures. Then they're stuck. They haven't developed their sounding-out skills. Their bank of known words is limited. Reading is slow and laborious and they don't like it, so they don't do it if they don't have to. While their peers who mastered decoding early are reading and teaching themselves new words every day, the kids who clung to the cueing approach are falling further and further behind.
These poor reading habits, once ingrained at a young age, can follow kids into high school. Some kids who were taught the cueing approach never become good readers. Not because they're incapable of learning to read well but because they were taught the strategies of struggling readers.
Another reason cueing holds on is that it seems to work for some children. But researchers estimate there's a percentage of kids — perhaps about 40 percent — who will learn to read no matter how they're taught. According to Kilpatrick, children who learn to read with cueing are succeeding in spite of the instruction, not because of it.
Maybe your kid is one of the lucky ones that can read fine regardless of how he's taught. But not everyone will be. That's the point of changing how reading is taught, to be more effective for the highest number of people.
But you could also try giving him a reading test like the ones presented at the top of this website https://readingtests.info/ and see for yourself how well he reads an unfamiliar story.
The tree on the right has that block missing in its shadow, the trees on the left are casting their shadows in a slightly different direction, and they guy on the dirt path's shadow seems too dark and clear. Once you pointed out something was wrong, it's hard not to see other mistakes.