There's a bit of a counterpoint to this: with papers, it's easier to point to your body of work (peer-reviewed and, if you're good/lucky, peer-understood-and-approved) as clear evidence that you can do research. Without papers, or with very few papers, that evidence has to come from somewhere else. My understanding is that somewhere else is usually recommendations, from your advisor and other people in the field. Some reasons to dislike that system include:

1) it gives advisors a lot of influence over the student's career (obviously, if you have an actively hostile advisor things will be hard in any system, but I have known successful faculty who had indifferent fund-and-forget-style advisors who wouldn't know enough about the student's field to write a good recommendation)

2) informal "I like this person, hire them" networks tend to select for people who are like current participants in the network

I agree that a coarse "do they have at least x papers?" way of evaluating researchers is silly. But it's not crazy to have 10 papers when you graduate. That's about one paper every 6 months in a 5-year program. Six months is a long time, almost a thousand hours of work. If three people are focused on a project, it's pretty plausible to get a cool result in six months.