From Why Johnny Still Can't Read, by Rudolf Flesch: he's quoting from Teaching to Read, by Mitford Mathews:
On page 159 of his delightful book Teaching to Read, Mitford Mathews tells the following story:
A group of educators visited a Chicago parochial school where the Leonard Bloomfield phonic system was taught.
They were taken into a classroom of perhaps 40 first grade children. On the teacher's desk were elementary books from various grades. The visitors were invited to select a book and ask any of the children to read from it. The readiness with which the children read was unusual. One of the guests happened to pick up a sixth-grade science book and asked one of the boys to read a passage from it. In doing so the child encountered and read the word "satellite". Father Stoga (the superintendent) asked him what the word meant and the child said it meant a big object in the sky. Dean Gray, the man who gave us Dick and Jane, found the answer unsatisfactory, showing that the child was reading, that is pronouncing, quite beyond the vocabulary appropriate to his age, and not getting the sense of what he read. He explained to the other visitors that what the children were doing was in no sense remarkable. He said that reading experts had long known that children could rather quickly be taught to pronounce words with remarkable glibness but that real understanding of what was read was another matter entirely. He pointed out that these children were mere word-callers, that they were pronouncing well beyond their mental ages, and that they were heading straight for serious trouble later in their reading development.