One of dd's best friends finished reception not being able to read or write. He got some extra help in Year 1 and suddenly things just clicked into place for him. I dont think it helped that he was youngest in class, not sure if that is applicable to your ds, but they do all learn at such different paces. His biggest problem was that he was very unhappy because he felt that he was only one who cuoldnt read or write. I would say if ds seems happy I wouldnt worry too much, alhtough I would do as nutty says and go and see teacher. Splitting him away from all his friends seems a bit harsh.
Most importantly I dont reckon you should feel guilty at all!
I honestly wouldn't panic at this stage rickman. One of my boys couldn't read any of the high frequency words at the end of reception and I was getting in a bit of a tizzy. One year on and he can read, write stories, everything! The more structured teaching of Y1 seems to have helped him a lot. Why don't you have a lovely summer, read to him lots and then see how he's doing half way through Y1?
My dd is a June born, she couldn't read or write very well until half way through Year 2 then ended up with 2A's for reading and writing in her SATS. She didn't get any extra help at school, we just encouraged her at home at her own pace.
Rickman, I'm in Scotland where we don't have a Year R, they are still in nursery and don't (officially) learn to read and write until they are in Primary One (equivalent to year one, but the cut-off dates are different). Dd1 was quite old in her year, and learnt to read/write whilst still in nursery. Dd2 is young in her year and didn't start learning to read and write until she was in Primary one. In nursery she knew her letters and numbers but we didn't start her on reading (I was her nursery teacher!). But she is a very bright child who has now just finished P2 but is working at P3 level.
Personally I don't think many children are ready/receptive to reading and writing at reception age. I doubt very much it has anything to do with what you did/didn't do and much more to do with his age/motivation/maturity etc.
Rickman - I've still got some ORT stage 2 books from when DD was learning to read - I can dig them out and send them to you if you think DS would be interested in doing any reading during the holidays????