I don't think this is a big problem. If he's interested enough in reading, his capacity will increase rapidly, along with his speed. I certainly wouldn't push him, as you'd run the risk of dulling his interest. If he wants to read, he'll read.
One thing you could do is see if he's interested in doing some phonics or other drills to increase his speed. There are some good flash card sets out there. He might have a lower reading stress level if reading each word was much easier. He may be able to sound out words at a high level right now, but it may be a slower process than he'd like.
Have you seen the Otto and Uncle Tooth stories by Geoffrey Hayes? Some of them are out of print, but I think they're great for what they are: whimsical, fun adventure stories, with vocabulary that's not too challenging. They're short enough for most early readers to memorize at least a lot of the content and recall it in context, so they're good for increasing confidence as well as, I suspect, sight word recognition. They're also organized in mini-chapters, so that your son can feel better about leaving one in the middle.
My DS4 is going through a Tintin phase right now. Something like that might fit the bill; your son can read as much as he wants at a sitting, vocabulary is not so difficult that an early reader can't figure out the tough words from context most of the time, and there is a picture in every frame to keep interest up, if your son still likes a lot of pictures. They were published originally as comic strips, so they're a thrill a minute.
![smile smile](/bb/images/graemlins/default/smile.gif)
Also, the DK big flat books are great IMHO for such a situation. They are meant for browsing, and there is a fair amount of advanced vocabulary on most of the pages, though often in the notes attached to the pictures.