You are operating under a false assumption. That is that all public repositories (i.e. Open Source) are filled with work by unpaid volunteers. That is simply not the case for a large portion of Open Source projects (and therefore public GitHub repositories).
I've been an Open Source contributor for more than a decade. I would say 90% of my open source contributions have been work where I'm extending or improving an Open Source project's code to suit a paying client's needs.
I'm not sure what you mean. I am aware that not all open source is written by unpaid volunteers but that doesn't address my central point.
If the industry demands that everyone write code, be it OSS, personal or just random junk code because they HAVE to, then github/bitbucket/launchpad/sourceforge/etc plus individual portfolios will see an inflation of sorts in code written, some of it good, most of it bad or mediocre. Let's just keep off-hours code as a bonus and not hold it against someone if it is not there. Keep fun-coding for fun! :D
Wouldn't you rather have people contribute to an OSS project because they want to, not because they feel compelled to?
I'm not entirely disagreeing with your argument, but isn't it kind of like saying "if the industry demands that people write job applications to get a job, they will be flooded with bad applications"? While that's true, it doesn't change the fact that you need data to evaluate applicants on. I don't see how people will think that writing crap code will improve their chances.
Besides, there is absolutely no difference between "counting something as a bonus" and "not holding it against someone". Hiring is a zero-sum game, your advantage is necessarily the others' disadvantage.
I've been an Open Source contributor for more than a decade. I would say 90% of my open source contributions have been work where I'm extending or improving an Open Source project's code to suit a paying client's needs.