Do baby blocks help kids learn how to read?

Not especially. They can teach kids to recognize the shapes of the letters, especially if you use the letters as you play with them. "Here's the A. Let's put that on top of the B." Then once the child learns the letters- "Can you find the D? Put it next to the S."  And "Let's spell your name with the letters?"

Children don't have to be reading when they start school, but they have a definite advantage if they recognize the shapes of the letters. 

They are a starting point to eventually learning to read by teaching what the letters (and numbers) are and the sounds they make. They teach nothing but how to stack blocks unless a parent actually spends time teaching the child what the symbols mean. Once the child can recognize the letters and make the sounds they can be taught how to link letters together to make short words. When they can understand how those links work they're on their way to reading.  

How exactly would that work?  Those blocks are of the alphabet and numerical, so how would they 'teach' any sort of reading skills?  It might help an older toddler learn the alphabet, but no one is going to learn to read off of simple blocks.