"very regimented sweatshop ... The good part is that the developers there have a set 8 hour workday and leave earlier in the afternoon"
You use the term sweatshop, and then say everyone goes home early. Really?
" rigid working hours"
Business hours are not for everyone, but they are for a lot of people, and they help foster collaboration.
"everyone is expected to show up at 8am for breakfast"
Not mandatory (it's an incentive to come in on time), but it is free.. As is lunch. Not dissimilar from most SV companies.
"mostly to prevent procrastination and force people to at least try to code"
So, it's a sweatshop because people are encouraged to work, and not browse Facebook behind a closed door?
There are lots of opportunities to take a break, from Xbox to ping-pong.
"It obviously works for them because they can just churn out sort-of working apps and let some other suckers deal with maintenance/rewrites later."
This is quite a conclusion to draw from a video.
You do realize that outside of R&D, most Labs teams are balanced customer/Pivotal pairs? There is no belief in handing over to a maintenance team, let alone doing the development by ourselves. You build it, you run it, is the mantra.
The whole business model is to build products while teaching companies a culture (open, Devops, collaborative but high discipline) and process (XP, CD) and tools (PaaS, open source) of how to build software productively.