Yes, it's very important to practice reading at first sight. Being able to read well at first sight makes it much faster to learn new pieces and, ultimately, possible to play them reasonably well without having practiced them at all. Reading at first sight improves simply by learning the repertoire, but not as quickly. In fact, most sight-reading errors usually occur when a piece of music takes an unexpected turn and deviates from the common pattern.
However, these errors are few and far between those who dominate sight-reading. An experienced visual reader will have learned not only to see patterns, but also to read a piece of music in advance while playing it. Often, looking forward several bars for anything complicated or unexpected is done while holding a bra or resting. Jazz musicians read at first sight, but they often use a main sheet instead of traditional notation.
A main score has an annotated melodic line, the words of the song, when appropriate, and the symbols of the chords to give structure to the improvisation and to accompany it. It goes without saying that reading at first sight is an important skill as a musician. You read new pieces at first sight in your rehearsals, you need them when you replace a big band, and it's a dreaded part of the audition process. It's by no means the most important skill you should have as a musician, but if you want to be an “active musician”, it's something you definitely need.
Volume 4 is by Jeff Brent, jazz pianist, composer, teacher and author of Modalogy and other acclaimed books on jazz theory and education.