U.S. Grant, one of the most famous generals of all time would beg to differ. Not to mention the sheer amount of other admirals in the 19th and early 20th centuries that had full beards who are now revered. That is complete and utter bull, let me tell you.
The only reason why it is not allowed now is because 'it doesn't guarantee a full seal on a gas mask', which I think is also totally bogus. Men are inspired by quality leadership, coolness under fire, and a great example of conduct, not because of no beard.