Kids should learn both phonics, spelling rules, and site rules.
My oldest learned to read first by phonics but we read books that had harder words, words that could not be sounded out. I repeated over and over “English is a funny language…not all words follow the rules” and would always help him out with the “rule breakers.” So he knew from an early age that though it was good to sound out words it wasn’t always going to work.
But by the time we were doing this he had already been memorizing books we read to him. It’s all part of the reading toolkit. No method is bad, but neither phonics nor learning site words is a complete method by itself.
But like people said, one method doesn’t work for everyone…but I think learning both phonics and to recognize words by site and context is important.