In addition to the sibling's excellent "candidates who work at companies that don't let them show you their current code, and have a home life that occupies their time outside of work", here's another category of candidates you lose: people who code differently in their downtime than they do at work.

If you looked over my github, you would see most of my commits are ones that, at work, I wouldn't accept from anyone. The code is sloppy, there are no tests, it looks like someone was just trying to get something working as quickly as possible with no thought for maintainability or understandability. But, of course, that's exactly what I was doing! When I code in my spare time, I'm solving problems that I've run into in my spare time, and I approach it very differently from in my work life. The constraints are different, and so the solutions are different.