Totally agree - I'd like to add one huge benefit more: you create great longterm value for your future customers. Sometimes people encounter blogposts which are couple of years old and contact you - it's an awesome felling to help people in the long run. If you keep on blogging readers will follow!
That's not what I've meant - I don't allow working after hours in my companies. But I prefer a team, which at work focus just on my project. Side projects interfere with each other and that can be deadly to productivity at work. I wouldn't ever try to tell anybody what to do with their free time, relax man :)
Usually you need a team focused on just one job to get done - otherwise there's no 100% commitment to your project. You don't want your employees to switch between priorities.