It has been a while since I visited this thread - sorry.
We do not forbid what employees do on their own time. Our dictate only revolves around what they wear to work and for work functions. Further we encourage employees by helping to pay for alternate products which I suspect most other companies do not do. An employer has, as they should, every right to dictate things related to employee appearance and image. Our company policies are written and shared with prospective employees before they go to work for us, so any prospective employee has a right to say, "No thanks" and accept someone else's job offer.
Every company has a corporate culture, and in my experience, the larger the company, the more it is enforced. I had an Uncle (now deceased) who was a V.P. at Cat before he retired. He worked his way up the ranks starting in the foundry before graduating from college. They had very detailed manuals that included where you were expected to live (which changed as you moved up the ranks), the brands of clothing you were expected to wear (which also changed as you moved up the ranks), how you were to expected to wear your hair (again, it changed as you moved up), and what organizations you were expected to join and participate in. He moved eight times all in the Peoria area, and changed his wardrobe and hair numerous times over the years. Even his wife was expected to be involved in local organizations which changed as he moved up.
He loved playing baseball and basketball, but as he moved up, he learned to play golf and tennis. Our employees are given every chance to participate in the shooting sports. It isn't mandatory, but if they choose not to participate they do miss networking opportunities. Each company develops its own culture, often based on the CEO's own tastes. It is just the way it is.
All of this is pretty normal at large companies. Following the rules certainly paid off for him. If someone didn't like those rules they could always go to work somewhere else.
What we do with our much smaller company is nowhere near as intrusive.