I think there is a difference between hiring students and hiring professionals. From my experience (currently in school), my peers that have side projects (including myself) enjoy programming for the challenges and would be, IMHO, better employees. The students that don't have side projects tend to be in school to JUST GET A JOB. They don't experiment with code and generally don't have a passion for it.
In the end, I think the author is correct when it comes to students (however, the author doesn't address the difference between students and pros)... Maybe not such a good idea for the in-the-field professional.