She's basically claiming that anyone who tries to work while going to school will end up cleaning truck stop restrooms for the rest of their lives.
As far as what you're saying, I've seen lots and lots and lots of students succeed and get into good graduate programs who also worked part time jobs. I was one of those kids. I worked part time all through BYU and still managed to get good enough grades to get into a top 20 law school.
Even if you're so concerned about your kids working and trying to attend class, the point still stands that they should be working during the summer to develop jobplace skills of some type. Also the point my friend made still stands. Once kids get out of grad school, if you take two kids out of the grad school, and one worked a part time job in college and the other didn't, the kid who worked his way through school will be a more successful employee at his job more often than the other will.