It isn't anymore. From man rm:

     --preserve-root[=all]
         do not remove '/' (default); with 'all', reject any 
         command line argument on a separate device from its parent

The era of computing that the story claims to come from sounds like the late 1990s. By that time UNIX could have had that fairly easily; the resources were available. However at the time we were not that far off from the era where every byte counted, and there were a lot of people who had been programming for decades who were still in the mindset of "every byte is precious". In that era we still had the last few people running around claiming that writing code in anything other than straight, raw assembler was a waste of resources, though they were fading fast by that point. Anyone who has learned programming in an era of gigabytes may not understand just how expensive once upon a time even so much as a "nice error message" was, and every disk block of code that was going on to every system was a disk block unavailable for the user. UNIX used to be a lot sharper-edged than it is today.