Well, I don't know but I'll chime in with some citations anyway. My guess is that the rate of incidence is dependent on a number of other variables. Thus, you would expect to see a higher incidence in some populations than others.
The evidence is mixed on this topic. Frank Vellutino is one of the major contributors to this line of research. Studies in several US states done by Vellutino (Albany, NY), Torgesen (Fla), someone in Texas -- I forget who-- and elsewhere came up with fairly consistent findings that explicit instruction in reading, including code knowledge, blending and advanced phonics skills reduced the number of students with decoding disabilities to under 10%. (The range was 3%-10%).
Vellutino's studies, and some others, did not include children with IQ's below 90. Decoding difficulties, per se, are not correlated with IQ.
Different programs were used, as well as ad-hoc instruction that drew on various sources and materials but was focused and explicit. No particular program or approach clearly surpassed others -- some were more suited to 1:1 instruction, others to group instruction.
Gough and others published a large-scale study that showed more than 95% of children in first and second grades could be taught effectively enough to score above the 25th percentile, which is considered in the average range.
One problem with all these studies, however, is that they lack longitudinal data. Children who successfully master basic decoding skills and are reading well in first and second grade may fall behind later for a variety of reasons (no single cause). Some continue to struggle with decoding skills at higher levels, others with syntax, language comprehension (including, but not limited to, vocabulary), fluency, auditory and working memory, and more. While poor readers in second grade rarely end up as outstanding readers in fifth grade, the opposite can happen: the good reader in second grade can be a failing reader in fifth and beyond.
Some of Vellutino's articles:
Vellutino, F. R., Scanlon, D. M., Sipay, E.R., et al. (1996). "Cognitive profiles of difficult-to-remediate and readily remediated poor readers: Early intervention as a vehicle for distinguishing between cognitive and experimental deficits as basic causes of specific reading disability." Journal of Educational Psychology 88(4): 601-638.
Vellutino, F. R., Scanlon, D. M., Snowling, M. J., & Fletcher, J. M. (2004). "Specific reading disability (dyslexia): What have we learned in the past four decades?" Journal of Child Psychology Psychiatry 45(1): 2-40.
Scanlon, D. M., & Vellutino, F. R. (1997). A comparison of the instructional backgrounds and cognitive profiles of poor, average, and good readers who were initially identified as at risk for reading failure. Scientific Studies of Reading, 1, 191- 215.
Vellutino, F. R., Scanlon, D. M., and Tanzman, M. S. (1994). Components of reading ability: Issues and problems in operationalizing word identification, phonological coding, and orthographic coding. In G. R. Lyon (Ed.), Frames of reference for the assessment of learning disabilities: New views on measurement issues (pp. 279-329).
Other sources make the point that low-achievers (who may find reading difficult for varying reasons) need much more instructional time -- at least twice as much, sometimes 3 times as much, and in a more intensive, fast-paced, interactive milieu. This is rarely provided and probably not even possible in most public school settings. The only longitudinal accounts of such success are from the UK, and the details of what was done and when and how in both the Clackmannanshire and W. Dunbartonshire studies are sketchy.
Nothing similar has taken place on this side of the Atlantic; the best overall results have been from DI schools, but even there, population mobility, staff turnover and limitations on instructional time lower the ceiling for student achievement.
Accelerating Reading Attainment: The Effectiveness of Synthetic Phonics by Joyce E. Watson and Rhona S. Johnston (pdf file)
One Man's Quest to Eliminate Illiteracy
West Dunbartonshire's Literacy Scheme