I could have said Rasputin, you'd still know who i was talking about right?
Thanks for correcting me I am not good with names. I still mistake Schubert and Schumann all the time -_-
I'd actually have assumed there was yet another damn Russian I'd have to go out and explore!

Sight reading can be used in many ways and you have given a few good examples. It is not necessarily being able to pick up a piece and play it at mastery, but at the same time it is and you should be able to do this for particular pieces. One should also question what is stopping them from being able to sight read other works with mastery, you can certainly discover a lot studying the piano in terms of sight reading, sure puts a different spin on the approach to the study (Eg: reading hundreds of pieces a month opposed to polishing a few pieces to mastery).
Oh, I agree you should be able to play some pieces straight off. I don't think it's ever possible to get a first time through up to the musical standard of a considered performance, but it should be acceptable.
One of the things that can stop people being able to read a piece is not their sight reading abilities at all - it's simply not possible to read through a piece you are not actually able to play. So whilst I think that people would benefit by reading a greater amount of repertoire, I still think it's necessary to target pieces to bring up to scratch that will develop ones technical skills, and also provide the sort of depth of understanding that complements breadth.