You say "...it's suggesting that rather than searching for a need you want solved and framing it in terms of a realistic goal and whittling it down to a compelling product, you should be identifying someone else's need and building that product."
But "framing it in terms of a realistic goal" and "whittling it down to a compelling product" both sound like code to me for "making something that other people want / need".
One key part of customer development is that creating a new market (for something that you exclusively need) is extremely expensive. You have to educate your customers on why they need your product and push against a massive amount of resistance.
I think it's pragmatic then to accept that working with an existing market in some shape or form is inevitable. So, why not embrace it? I think that's the market-driven approach.
You can still come up with novel and fun ideas that you own, but ground them in an existing market that you've researched.