This.
Before the crash I-Banking bonuses for first year Analysts at Big 4 firms were on the order of $80-100K each year. Assume you bank all of that each year and to be conservative, that it was 80K each year, you now have 320K. This will pay for all three years of Yale Law ($142.5K) and leave you enough to live on all through Law School. Presumably less selective schools cost less, so that's an upper limit.
As a 1L your internship oportunities are pretty limited, and I'm guessing that interning at a lower market firm doesn't really help that much for the internships you really want in 2L and mid-market firms won't trust you if you lie and say you're really enthusiastic about working for them because of blah.
Interns aren't all that productive because they have no experience with the law as it's practiced. First year associates aren't that hot, so internships are basically a hiring expense and it doesn't really pay until they're productive in second or third year.
An interesting internship, like with a startup could really help if you want to get into a firm in that space like Wilson Sonsini. Outside of that it could be positively harmful as a sign of outside interests and a life, not conducive to running up 2,000 billable hours a year. Most firms probably can't afford to be that selective though because most lawyers quit corporate law and go in-house counsel or something less soul crushing when they pay off their Law School loans and maybe build up a nest egg.
jwb119 probably isn't going to Law School for the money afterwards so much of that probably doesn't apply, but the how he can afford to make this offer does.