If a company's not willing to be flexible about something like this, then it is the last place you want to be working.
It makes Zynga look arrogant, inflexible and downright mean.
If a big company buys a small company, how common is it do contract negotations with the employees of the small company? or is the "take it or leave" approach the norm?
Sometimes, acquisitions are for talent reasons, sometimes it is for product reasons. In the former, you buy a company specifically to acquire a person (or people). Those people are aware of this & have some negotiating power. Similarly, in the latter, the acquiring company might want to keep the product team in tact (at least for a short while), so they might have some power, but in both cases, the other people are more or less on their own with a "take it or leave it" type of offer with very minimal room for negotiation. There will be examples counter to this, but this is in my experience (mostly from the "big company" POV).
Of course, refusing to negotiate has the effect of establishing a particular kind of power relationship with the potential employee, which could be one of their goals.
Here's a guy who has enough mojo that he produced a well-reviewed game on his own. That's exactly the kind of person I like to hire because they can think broadly about the work in a way that many people can't. Zynga obviously doesn't want employees devoting significant time to competing with them. But leaving the game up does no harm. So they negotiate the exception, file the paragraph away for when this comes up again, and everybody's happy.
What we learn from this is that they don't really want people this smart and creative. They want somebody mindlessly obedient who will go and do the dubious things Zynga does.
So I think it's more accurate to say that managers thrive on process more than empowerment, because a lot of companies are functionally equivalent to feudal empires in their social structure.
Especially in Zynga's case, when they are quite used to people having side projects. What the author didn't mention was that Z has a standard Prior Inventions addendum. I should know, our company was acquired by Zynga, and 100% of the offer letters were accepted. Several of us had prior works and side projects, including my cofounder, and we simply listed them.
What he wanted sounds like some specific addendum that called out his app and maybe made some forward looking promises about it... Or... Something.