K.P.
My daughter will be 3 in a month and is currently using Set 1 of the BOB books. Like your son, she recognizes all uppercase and lowercase letters along with their sounds. She has had the set for about a week and is "reading" all the books. I will stick with this set until I am confident that she can recognize all the sight words and sound out all the phonetic combinations that are introduced in the first set. I do not believe learning to read at this age is as important as acquiring a large and varied vocabulary. However, if your child wants to read, always follow your child's lead. Good luck.