Maybe it's since I've always worked for companies with > 500 employees, but there is always a pile of work on the products I've worked on that there was little time to contribute externally.
There are so many factors that go into whether or not a repo becomes popular, which aren't necessarily related to anything that reflects on the creator's merits as an engineering hire. I think you'd skew your candidate pool in a weird way if you leaned on these metrics too heavily. Honestly, I'd be curious to hear more about how it's used in hiring.
At any rate, enter the law of triviality. Making something simple that lots of people will understand is more likely to lead to more stars than something brilliant but complex, yet more indicative of development skill. This selects for gaming of the system and/or salesmanship; no doubt said employers will screech about a lack of "qualified" candidates before long.
I know others have waxed on the irony of the centralized role GitHub plays in a supposedly decentralized world of the DVCS that is git.
It would be cool if there were a Behance or even a Dribbble for programmers: a way for us to present our creations well but also easily in a host agnostic and semi or fully automated way.
Many of us or don't invest the effort necessary to maintain a work portfolio, unlike say design oriented fields where it's the norm. I think there could be something to it.