I taught pre-k, kindergarten, first and second grade before doing daycare. I'm almost done with my Masters in Reading Education, so I can offer you some statistics...
Do kids under 5 need to be drilled with sight words? Definitely not. Should they be taught letters and sounds? Absolutely, when they are interested and able. Studies have shown that kids' abilities at age 3-5 is highly predictive of their reading ability through 6th grade. Is this stat. always true and things can never change? Of course not, but I think it has powerful implications.
Preschoolers need to do the cutting, coloring, socializing, learning colors and numbers...and letters and numbers. It should not be PUSHED on them by any means but by approaching it in a fun way (such as leap frog games and movies), you are putting the kids at a great advantage for later in life.
I work with 3-5 year olds only, mainly for this reason. Under 3 years old, children should not be pushed with formal education. They should be talked to and have things pointed out to them, in order for them to develop rich vocabulary and meaningful experiences. However, sight words? There is really no reason, at all.
Just my opinion.
