I can read pretty well - I attribute that to having played in an accordion orchestra as a youth, that played classical music from the original scores - and can play a little by ear ... I've heard many 'ear' players, and they usually are excellent players, and I believe playing by ear gives them an advantage because they hear such beautiful chords ...
As a player, I try to address a song as a singer, playing phrases as if I were singing them as opposed to playing them ... other than classical music, which is expected to be played 'as written', I would not play 'popular' song note for note as written...