I totally disagree.

Side projects are a way to experiment and broaden your knowledge of technologies. Focus is good, but prolonged focus can lead to boredom and resentment.

Giving employees the chance to vent their creativity with new and fun technologies (via side projects) often leads to much happier employees. There is also a built-in feedback loop that allows that knowledge to flow back into the company with better practices, architecture or just the use of better tools.

Let me summarize it this way: Side projects are the best form of training you can provide for your employees.

And that's why Google has 20% time.