It's certainly a hoop if you're already employed and have a multitude of options that I would presume the best and the brightest all do. It can come across as nonsense because if I'm good and know I'm good, I'd expect any potential employers to be able to recognize that easily without a trial period. And it certainly reflects a fear of commitment, warranted or not. I'm not sure why any in-demand developer would subject himself to that kind of trial period - not only is it against the terms of most employement agreements, it represents disproportionate commitment to a single job lead, which may be better spent on interviewing and receiving other offers. You, as an employer, are not special and the best and the brighest recognize that.
I don't think it works well as a filter either - a technical interview can easily assess capabilities and while you're right that it cannot accurately assess work ethic or motivation, a trial period cannot either! A desperate candidate during a trial period is generally going to behave very differently than he would a year down the road when he feels bored and the job is secure in his mind. Is it a better filter in a vacuum? If you start with the same sample of candidates, all of whom had to go through whatever process you devise, would a trial period make it easier for you to find the best candidates? Of course. But having such a process significantly skews your candidate pool to the desperate. That's not necessarily a wrong approach to recruiting, but it has nothing to do with hiring the best and the brightest. In addition, unless you're extremely careful, you'll be mostly judging candidates based on their familiarity with your technology stack and workflow, as opposed to long-term potential because that's what short-term productivity depends upon.
It may not apply to you in particular, but one other thing that would make me worry about a trial period is that it's indicative of two other personal flaws on the part of the hiring manager - he may be 1) indecisive and 2) technically incompetent. The indecisiveness part is obvious - not only is not being able to hire without a trial period a mark of indecisiveness by itself, it's also a hedge against future indecisiveness in getting rid of employees that don't work out. I also find that technically competent people can judge competence in others very well, very quickly. They aren't always right and there are qualities that only manifest over a longer period of time, but those qualities can't be judged in a few days of work.
Paul Graham's advice to investors is apt here:
http://paulgraham.com/angelinvesting.html
"How do you be a good angel investor? The first thing you need is to be decisive. When we talk to founders about good and bad investors, one of the ways we describe the good ones is to say "he writes checks." That doesn't mean the investor says yes to everyone. Far from it. It means he makes up his mind quickly, and follows through. You may be thinking, how hard could that be? You'll see when you try it. It follows from the nature of angel investing that the decisions are hard. You have to guess early, at the stage when the most promising ideas still seem counterintuitive, because if they were obviously good, VCs would already have funded them."
Stringing people along while not being able to make up their mind is what mediocre investors and VCs do - without seeing good evidence to the contrary, I'd guess that this applies to employers as well.
Edit: in case my point wasn't clear, I'm not saying the approach is wrong or doesn't work or anything along those lines, merely that it's not how you hire the best and the brightest. Now, it's possible he meant "the best and the brightest" in the cliched way where everyone thinks they hire the best and the brightest, in which case it's fine. But in a literal sense, if your organization needs the best and the brightest, you won't get it following those suggestions.
Edit2: the point of pg's advice isn't that being decisive somehow is correlated with risk-taking and thus higher returns. The point is that being indecisive doesn't lead to significantly better decisions and if you can't make decisions quickly, you won't get the very best deals. If you're known to be indecisive or advertise this up front, no one who can get other investors will come to you. This is absolutely the case for talent.
Cultural fit is not a good reason either. If you can't judge whether someone fits in during the interview, you're probably not going to figure that out during the trial period during which you have a desperate person desperately trying to fit in. What's worse, this very mindset of "let's hire people who fit in" leads to the worst culture. If culture matters to you, hire people who are different.
And yes, finding good engineers, regardless of cultural fit, is by far the hardest problem. If you're optimizing for cultural fit and you're not Google/Facebook-type talent magnet, you're not even in the competition for the best talent. This may be fine if your bar is low - and let's face it, almost everyone's is - but again we're no longer talking about the best and the brightest.