K&R isn't a good introduction to modern C programming. Even the ANSI edition of the book is outdated. There are better intros in the forms of books and web sites.
Yes but K&R is a classic. Its clear style paved the way for programming books ever since. You are correct that the standards have evolved over time but remember the employer in the discussion doesn't need a C programmer, they need a .NET developer. This dude will probably never write a single line of C. Spolsky recommends K&R because it's a good test and it teaches a methodology that serves a student well in .NET. And it's only 228 pages.
