it's called 'synthetic phonics', juno, and it's a really successful strategy, but any experienced teacher will tell you that it's best used in conjunction with other methods (English isn't a phonetic language - all the rules have exceptions).
I think the main thing is that kids are taught to love books and read them for the immense pleasure they can bring. Sharing a book with even the youngest child is magic, and if they see adults reading then they are having good habits modelled to them as well.