I don't know if that's the case here, but a lot of European colleges require summer internships. Compensation is sometimes permitted, but status of employment must be an internship.

In the US tech industry, internships are actually fantastic, fantastic investments. You get paid incredibly well, get good names on your resume without 2+ year long commitments, get to network with a variety of people (2-4 companies/regions/industries in 2-4 years) and gives you amazing bargaining power when you head into a full time position.

It's been my experience that tech internships are paid some reasonable fraction of what a full timer would get in exchange for a more interested program of work - I get paid 50% of what a full timer does, but I get more training and more flexibility in what I work on.

A lot of places won't hire someone full-time for just the summer. I was in the same situation: I could have applied for a full-time job, but I can't be full time once school starts up again.

Agreed, if indeed he is using "internship" to mean "unpaid internship". Far too much importance is placed on unpaid work these days, particularly in tech, and it just isn't needed. He clearly has enough experience to spend his summer doing actual work, and should be compensated for it.

Doing an internship is sometimes more 'profitable' than not doing one. If you go with one of the big companies, you'll have a similar to full-time new grad salary plus free accommodation of really high quality that would normally cost you in the Bay Area easily upwards of 3k a month.