really great points! sometimes we forget how we got somewhere. when i read your post - it occurred to me that the interval reading was something very very important, too, to sightreading.
also, stevehopwood is right on the money, as well. i also do not give the same lessons to everyone. there are so many different types of students.
i think it took me about three years (if i remember right) to learn all the basic chords. perhaps that is another thing that one can do (after doing what lostinidle said about reading two-note chords, three-note chords, and so forth). to 'feel' what they look like. and visa-versa. everyone usually 'gets' the ! IV V chord. with very beginners - i have them share the notes in tetrachord fashion, first. if you have 5432 2345 as your left and right hand fingering. you can (after playing a scale in any key) have them play the thumb of the left hand while raising the right hand over their 'notes.' this would be your I chord. then, similarly, the left hand plays the thumb and produces the IV chord. then, i tell them to move all the notes over one space and produce the V chord - and finally left hand I chord again. usually all my first year students know all the major scales and basic chords and how they feel.
second year students start getting into separate hand stuff (with me). left hand accompanying - right hand melody. the reason i delay some of this is to accurately learn all the notes with playing melody mostly with right and left hand. if you skip over sightreading the first year too much - you have students that just gravitate to play by ear. they never really learn to sit down and read the notes. but, it's not a terribly hard task to read one or two notes at a time in various melodies of method books (put into tetrachord fingering) and or popular songs that you write down that fit into tetrachord patterns.
some students are very fast and learn all this in 4-6 months. it just depends on the age and how motivated.
imo, when students are pushed too fast to move from one thing to the next - they become careless and sloppy and guess. but, if it is slow and methodical - you're covering steps that they will remember and put together easily. hearing intervals is important too - so you can make up little tunes that go with each one. 'happy birthday' to a second, etc.
i used to make up games where the student faced away from the keyboard and i'd play an diatonic interval and the student would guess it. just focusing on on or two types of intervals each lesson.
my opinion is that it proves nothing for a teacher to have a student learn how to do this and that really fast. ie - be playing beethoven sonatas within a year. other teachers disagree. and, think that it's good for sightreading and learning within repertoire. but, some students burn out from all the work and others don't. maybe, as steve hopwood mentioned, to find the students workload comfort and go with the amount of practice time they are actually putting in. for most students under 8 - you're not going to be getting much more than the required 1/2 hour (unless you're like bernhard and giving them more than one lesson per week).