Is it ok for a singer to sing from a song book?
Yes - as long as he/she doesn't mind if this particular audience member leaves the room while he/she is singing.
The need to read the text while singing indicates that the song isn't ready for public performance and the singer hasn't yet made it his/her own - I can honestly say that I have never been moved by a song that has been read from a book.
It is insulting to the maker of the song and to the listener and it suggests, rightly or wrongly, that the singer believes the song not to be worth any great effort.
Put the work in beforehand and don't sing it in public until you have done so.
Would you attempt to sing a song in public if you hadn't learned the tune?
Jim Carroll