Does he recognize the sounds? Kids who don't learn whole word (many gifted do) learn phonetically. If you asked my youngest what a letter was he would respond with the sound/sounds not the name. You might try reading the word phonetically and see if it sticks any better or if he has more interest. I have two who learned by sight and two so far who have learned phonetically. It might have something to do with what type of learner they are, auditory or visual, I'm not sure. My DS3 really likes the IEW Reading PAL program here
http://www.excellenceinwriting.com/catalog/primary-k-2-pal-reading it has a farm theme (great for boys) and also uses file folder games (like parking cars) that are great at that age.
