A teacher can make sure their students can have plenty of music to choose from. A music lending library or a quick search of the web for free sheet music can put lots of interesting pieces at a students fingertips. However, finding pieces the student will enjoy can be a challenge for the teacher, which is often a good reason to put it back into the hands of the students.
A teacher can make sight reading a goal for the students by taking time to organize incentive programs. Maybe a race against other students to see who can play through the most music (sight reading doesn't mean playing a song more than once). Another goal could be, "instead of sight reading at two levels below your lesson book let's see if next month we can be only one level below where you're currently playing".
The time commitment factor doesn't have to be a huge amount; 3-5 minutes gets a person going. There are many sight reading books available that have 1-3 lines per day already organized. Perhaps daily reminders such as texts or emails are needed to play one song a day in old lessons books.
An eye problem can be one of the more challenging reasons a student has a hard time playing. If you as the parent feel that your student is having a hard time seeing the notes it might be a good idea to have their eyes checked by an optometrist. As a private teacher working closely with the student, it's often easier for me to notice an eye problem than it is for a school teacher. Privacy laws effect school teachers and they are not always free to share if they suspect a problem. If a student has to wear glasses at school encourage the student that they should also wear glasses when playing piano. If the problem seems more complex than that, check out this webpage (http://eyecanlearn.com) which has a wide variety of exercises that can help many students develop their seeing ability and reading skills.
Sight reading, like any skill, is one that needs to be intentionally nurtured and cultivated. This is a very rewarding ability and if this is something you or your student would like to develop, I fully encourage it and would be glad to help you design a program and collect materials to help you meet your goals.