Don't side projects establish that the candidate is actively keeping up to date on technologies and is so passionate about it that he/she works on it even outside office hours?

Side projects demonstrate that a candidate has other irons in the fire, which is a negative indicator for dependencies on the potential hiring firm. Plus, developers are rarely hourly positions with a well-defined "outside of office hours", outside work may be viewed as a distraction from what they could be doing for the employer.