I personally think sight recognition has it's merits, we don't want to have to consciously spell a word out each time we come across it. However I'm not sure sight recognition needs to be taught IYSWIM.
I think that the term 'sight recognition' is a difficult one because there are two 'understandings' of what it means.
The most common 'understanding' of the term is the one promoted by the 'look & say' method of teaching, whereby children were taught (or attempted to be taught) to recognise words as 'wholes' with no attention paid to the significance of the letters within the word. This was developed from the belief that skilled readers do appear to instantly recognise words as 'wholes' without having to sound out and blend them every time. As 'look & say' with a smattering of phonics has been the predominant method of teaching reading for several decades this understanding has become something of a dominant belief.
The other 'understanding' says that words become secured in long term memory and can be read 'on sight' through learning the letter/sound correspondences and using that knowledge to sound out and blend a word several times.
The difficulty with the first 'method' is that it is far more difficult to learn words as 'wholes' (hence the extrememly repetitious nature of 'look & say' reading schemes and a plummetting literacy rate in the 80's & 90's) and that it gives children no tools with which to independently work out what unfamiliar words 'say'.
The perceived problem with the sounding out and blending route is that it can take children a number of repetitions of sounding out and blending before the word is secure. Some children only need one or two repetitions, a few need hundreds and most children fall between the two extremes. The advantage of this method, though, is the fact that letter/sound correspondence knowledge gives the child the tools with which to independently work out most unfamiliar words.
What I cannot understand is that people are tolerant of the hundreds of repetitions of exposure to a 'whole word' needed to 'learn' it (see L & S's earlier post, for example) but feel that a child has 'failed' if they have to sound out and blend a word a few times before it goes into long term memory.
Another common misconception is that 'high frequency words' are in some way different from other words and are more difficult to learn. They are not. They are merely the most frequently used words in text. Most are completely decodable; a very few contain correspondences which a child wouldn't be taught at the start of learning to read. It is possible to teach a child to read without using any of these in the early stages but they have somehow become embedded in the 'must learn early' lexicon. So we teach them as 'decodable' but with a tricky bit. No flash cards of words to be learned as wholes!
If the OP is still with me after this rather long explanation I would say not to worry about your daughter still sounding and blending words which you think she ought to know, they will eventually get into sight memory. Trying to force her to read them 'by sight' might well turn her off reading altogether or she might develop a guessing habit (any old word will do just as long as I don't sound it out because sounding out and blending upsets mum...). Let her do what she needs to do to to consolidate her learning.