You're clearly not reading carefully, because I pointed out examples where I've done this, and I'm sure many others have as well. Most businesses are started on the side of something else, including most successful businesses. While it's likely true that you can't indefinitely work as an employee while building a business, you can certainly start a business that way, and it's been done many, many times before.
I'm not arguing that you shouldn't have the right to fire someone if you don't like them working on something else on their own time, just that your mindset is indicative of a larger management problem of viewing your employees as assets that you own 24/7. Why would anyone of value want to work somewhere like that? There are plenty of people out there who value output over input and understand that an employee's personal life is none of their business.