It's worth noting that depending on your location this is actually _the default_. As in, if it isn't in your contract, your side projects belong to your employer.
I asked about it, but without raising a formal complaint, I didn't get more than the general logic, which is "because you also learn from experiences on the job, it's unfair if you can can put stuff together and then sell it or even give it away for free to potential competitors".
I'm still considering whether or not to make a big deal out of it in future contracts; but next month I'm going to do a master's anyway, so it was a temporary limitation (and I accepted with that in mind).