Alan seems to make an overly broad statement, which is funny, but also weak.
Dijkstra decided to program using pencil and paper much later, and mostly because he (like most good programmers) already knew the solution before writing it down.
I correct you again for implying he wrote purely academic code. This is plainly false: for example, he specified part of and implemented the compiler of the Algol-77 language. He implemented one of the first multi-layer (ring-based) OSes.
And then you mention the day-to-day programmer is not in need of academic code. To the contrary! Dijkstra argued that the software crisis (the gap between what computers can do, and what they are actually doing) is caused because day-to-day programmers do not have the right tools and knowledge at hand. In EWD 340, Dijkstra argues this is caused by the mental overhead caused by clever tricks and languages allowing these tricks.
As a professional, I am constantly relating to concepts and code which have an academic basis. Examples are from type theory, lambda calculus, paxos, map-reduce, queueing theory, compression algorithms and many more. I have seen many programming languages, wrote assemblers, interpreters and compilers, worked professionally with imperative, OOP, functional and (higher-order) logical languages, so I dare to say that programming is not about what you can do with the language, but what the language does with you.
-- Alan Kay, The Computer Revolution hasn't happend yet — 1997 OOPSLA Keynote