Let's say you and I started writing code at the same age or time, and you code only 9-5, whereas I code an average of 15 hours a week more than that in my spare time. Two years later, I've gotten as much experience (or at least put in as many hours) as would take you >3 years to gather. Five years after we started, I'm 3 years your senior in terms of experience.
It's not that you won't be a good developer if you don't work on side projects; it's that as compared to anyone your own age who codes in their spare time, you're going to have less experience. You'll probably be way better at the guitar, or taking care of your dog, or whatever else you're doing instead of coding, but they'll be a better programmer.
Actually, that's not true. Their is a limit to how much each day you can "practice." I believe the number is 4 hours. Putting in more time doesn't mean you are learning more. It simply means you are putting in more time.
Experience != skill. You can spend 10 hours a week doing project euler questions, or hacking together whatever CRUD app sounds cool. But that doesn't automatically increase your skill at all.
Sure, the more time you spend practicing, you will likely be better than had you not spent that time. But to compare it across people is meaningless. There are countless numbers of those who have spent decades in the grind and aren't much better than they were when they started. Compared to someone fresh out of college who can code circles around most.
Experience itself means little, if anything at all.
It's not that you won't be a good developer if you don't work on side projects; it's that as compared to anyone your own age who codes in their spare time, you're going to have less experience. You'll probably be way better at the guitar, or taking care of your dog, or whatever else you're doing instead of coding, but they'll be a better programmer.