I've also read that pure sight readers hit a wall at some point (about 2nd grade or so) when the words get harder and more phonics is required. I think many kids don't hit this wall and intuitively grasp phonics early on.
I haven't found that to be the case with my dd (pure sight reader). She is 8 years old and she is at the very least at 8th grade level in reading. Most big/complex words are nothing more than compound words. If you know how to read two simple words, and they now appear together than you can read the new word as well.
