The full version of the Steve Jobs rumor was that he would fire you, on the spot, if he didn't like your answer. To this day, I think it was a myth that they used to spread to the newbies to keep them sharp and focused. And with Jobs's passing, we'll never know the truth now (unless someone was fired in such an encounter, and wants to speak up?).

Regardless of whether one's ass is on the line in an elevator pitch, it's still good advice. Especially because you're going to have to make that pitch about a million times throughout your life. So it's not just about intriguing The Boss; it's about intriguing everybody. (Or not losing everybody's attention, depending on how you want to look at it).