His response reminds me a lot of what I have read in Valve's employee handbook (http://newcdn.flamehaus.com/Valve_Handbook_LowRes.pdf) in regards to their developer culture. By what I understand, Valve has established a self policing system in which every employee has complete autonomy over what they decide to work on or contribute to. Gabe Newell is emphatic about the flat hierarchy of Valve and its peer-review system that replaces the need for managers. I've struggled to understand why this has been successful for them as an influential video game company, but it appears Jobs' insight underlines a similar truth. Good developers are not only great problem solvers, but managers in themselves that comprehend the work needed to be done and are willing to work with those smarter than themselves to see it done.
Look at the story that was kicked around recently about the fired apple developer who snuck back in to complete his work. That's the way the best developers are. They are intensely passionate about their work, and very self-driven. You can't get them to stop working on projects they care about.