I actually reject people without pet projects for an entirely different reason. I can find out much more about how you behave as a developer and whether or not you'd fit in with our company by reading your code than I can from any kind of interview or whiteboard challenge. Ideally you'd actually hire the prospective developer for a short contract project before hiring, but that has significant challenges and costs as well.

Think of a carpenter that claimed to be amazing at producing furniture, but had none to show you. Would you trust them on how well he could BS you in an interview? It's not about passion or dedication. If you, producer of code, can show me code you've produce, I'm taking a much lower risk on hiring you. And fortunately, there are enough people around with code to show that rejecting others is a pretty easy filtering decision to make.