This seems spectacularly unlikely given Joel's other writing and the fact that he's running a profitable company, the profits of which substantially depend on the quality of staff he hires. Saving 1% of payroll and giving up any substantial "edge" in development is a bad trade, and regardless of your opinion of Joel, I suspect he's smart enough to know that.

All the same pathologies seem to remain intact in this system.

All of those same pathologies sound to me like pathologies with the people not the system, and the solution is to just recognize that people who can navigate themselves around small obstacles are actually more valuable. People who complain at year-end about why they couldn't acheive their maximum potential need to be steered into a mindset where next time they find a speedbump to drive over or around it, not to stop and complain about the uneven pavement.