Side-projects can subside for a lack of experience to a degree. A fresh grad's resume with a ton of open source projects will look much better than one without. Or someone who is a developer planning their move into data science will greatly improve their changes by having some experience in machine learning and data analysis even if it's just in a side project.

However, I agree that unless a side-project has very high impact, it doesn't help much to have on your resume for people who have relevant work experience from a previous job.