The incoherency of the Randian distinction can be easily be illustrated by merely quoting any philosopher who understands the main points at issue. Consider what George Santayana has to say about Eudæmonism in Reason and Common Sense:
Eudæmonism is another name for wisdom: there is no other moral morality. Any system that, for some sinister reason, should absolve itself from good-will toward all creatures, and make it somehow a duty to secure their misery, would be clearly disloyal to reason, humanity, and justice. Nor would it be hard, in that case, to point out what superstition, what fantastic obsession, or what private fury, had made those persons blind to prudence and kindness in so plain a matter. Happiness is the only sanction of life; where happiness fails, existence remains a mad and lamentable experiment. The question, however, what happiness shall consist in, its complexion if it should once arise, can only be determined by reference to natural demands and capacities; so that while satisfaction by the attainment of ends can alone justify their pursuit, this pursuit itself must exist first and be spontaneous, thereby fixing the goals of endeavour and distinguishing the states in which satisfaction might be found. Natural disposition, therefore, is the principle of preference and makes morality and happiness possible.
Since Rand would probably have regarded "natural disposition" as a mere "whim," it is unlikely that she could have ever agreed with Santayana's conclusion that "natural disposition ... makes morality and happiness possible." "To take 'whatever makes one happy' as a guide to action means: to be guided by nothing but one's emotional whims," Rand insisted. "Emotions are not tools of cognition; to be guided by whims—by desires whose source, nature and meaning one does not know—is to turn oneself into a blind robot knocking its stagnant brains out against the walls of reality which it refuses to see." [VOS, 29]
We know from cognitive science that Rand was wrong about emotions not being tools of cognition; and we know from Hume that Rand was wrong about deriving moral ends from reason alone. With this knowledge in hand, we can appreciate what strange circumlocutions Rand forced herself into by her false moral ideals. These jejune ideals led her to deny happiness as a standard of morality because happiness is an emotion—a mere "whim"! Informed that their natural dispositions were merely whims that could not be used to judge how they should act, many of Rand's followers in the sixties and seventies wound up repressing their emotions and, because they could not derive moral ends from reason alone, turned to the heroes of Rand's novels. But here, as Nathanial Branden has pointed out, they were given examples that led them astray. In Rand's novels, moral behavior is characterized "by ruthlessly setting feelings aside," while immoral behavior is characterized by headlong dive into "feelings and emotions." By denying the role of emotions in moral knowledge, Rand became, whether wittingly or not, a voice for repression and dishonesty about the self.