I am an ex literacy co-ordinator now a parent. Children do have to unlearn capitals if taught first. If I had a £1 for the amount of kids I've taught liberally sprinkling capitals throughout their writing because parents thought they were helping I'd be rich. Believe me it does take time to get out of the habit.
The other problem with parents "teaching' their kids is they often pronounce the phonics wrong and clutter their brains needlessly with schemes like Letterland and reciting"a is for apple" etc.
Also if you teach phonics incorrectly it does set them back they have to re-learn the sounds.
My son was obsessed at 2 and before. He could read roadsigns and many other common words at a very early age. I trod very,very carefully.
The way I handled it was to read masses of quality picture books,answer his questions when he asked what a word said and read a lovely alphabet book a couple of times(obviously pronouncing the sounds correctly) . I didn't touch flashcards with a bargepole. My son is a very advanced reader for his age which brings it's own set of problems believe me. Interestingly his twin brother who was never interested isn't far behind.
If you must "teach" reading please,please,please pronounce the sounds correctly(Jolly Phonics show the correct sounds),read masses of quality picture books step right away from flashcards.
Also don't force anything at all. A child becomes and stays a good reader if they love books and therefore read a lot. If they are sick of the whole thing before even starting school,feel forced/nagged they will do anything rather than pick up a book. This particularly applies to boys.
Also bare in mind most countries teach reading far later than we do and have far better literacy levels.
I hope I don't sound full of wrath. As a literacy co-ordinator,ex early years teacher and mother of 3 under 6 I do feel I have a fair amount of experience on the subject.