1)Will you not hire a "salesperson" if they don't make sales calls in their free time, or a baseball team won't pick a player if they don't play in their free-time?
2)IMHO hiring should be a "selection" process and not a "rejection" process. Your application at this point looks like a "rejection" system.
3)Having github/open-source contributions is based on a lot of factors such as availability of free-time(being a good engineer dosen't necessarily mean one has to write code in their free-time), passion for a particular project/domain etc. Too much of anything causes burn-out.
4)Just because a lot of companies have this criteria, it does not make it a valid one. There's a lot of "herd" mentality in technology recruiting.
5)As a business decision I would think you should make open-source contributions optional and let the employers decide if they want it or not.