It seems to me we should be teaching all of these tools. It makes no sense to give people just one. Some tools work better in some situations, and some tools work better for some people.
Phonetic reading is very useful when learning many foriegn langues.
Contextual reading is always useful for learning new vocabulary and knowing when to look up a new word or skip and back-fill meaning as you get more context.
Sight reading seems like it should be the goal, so why not also teach it directly alongside those first two techniques for when the going gets tough?