I was thinking about this the other day too! A neighbor visited who doesn't know how to read, but that didn't stop her one bit. She picked it up and immediately began to "read" it by telling a story. It's the first time I had to pause and wonder if I have done my kids a disservice, if ever so slight, by teaching them to read- because it may hurt their imaginative story telling.
A few hours later my 2-year-old "read" a wordless book we checked out from the library, "Museum Trip", and I felt a little better. Kids don't have to use their imagination when they can read the words, but we can still give them this kind of stimulation in other ways, by play acting, by dialogic reading (now that I know what it is! Thank you.), and by presenting wordless books that force the story-teller to use their own words. A few other favorites are "Sector 7", "The Snowman", and "Free Fall".
I've decided that this kind of reading is even much more important for early readers because they are less likely to do this kind of reading on their own.
All in all, it's a great problem to have.