I play piano, and my sight reading is good, but sight reading doesn't help at all when I'm playing with other musicians who can't read music. We just agree to play something in a certain key, and then we do it.
Even in places like Nashville, a lot of musicians don't read music, but they learn new music and play together all the time. They know the notes and the keys, but nothing about transcription. They use the numbers system to learn new music. I've used it too, and it does work. The number 1 is always the base note. If the song is pitched in the key of "E," for instance, then 1 is always "E." And it goes up and down the scale from there.
Sight reading is a handy skill to have, but the same results can be achieved by other methods.