No, being able to identify all 26 letters is not essential (or likely) at this stage. What is important for a brand-new kindergartener is the knowledge of what at least a few letters look like, which shows an understanding of the significance of those shapes. Without that understanding, it's a lot harder to begin the pursuit of literacy -- and that's a major component of the kindergarten curriculum.
Basically, if your child can pick out, say, B, D and Z, he or she is in good shape.
Even better in the letter realm, but not strictly necessary, is the ability to recognize (and maybe even write!) his or her own name, and maybe recognize a few "sight words" -- simple words he or she sees often in daily living, like "stop," "go" or "hi."
Next, a different kind of readiness ...