I'm not misunderstanding the argument at all. I work with a bunch of good and great programmers and we don't touch pointers - at all. I would bet that without heading to the internet and re-learning pointers they wouldn't be able to do even a simple linked list with them.
I would think that unless you work in hardware, it might be quite hard to find low-level coding jobs these days. That's because it's unnecessary in most situations. We don't need to push bits around anymore and managing memory by yourself is like starting a fire with flint and tinder. Yes, it can be fun, useful, and interesting, but it is rarely necessary anymore.
I think you're misunderstanding the argument a bit. The argument is that people that don't understand pointers and recursion are less likely to be very good software developers. This is not the same as saying that people that do understand recursion and pointers will be good software developers. It's just one of many metrics used to weed people during the interview process.