That is not entirely true. Red Hat does not ship patches that are not accepted upstream, but they do ship heavily patched kernels. I don't think Linus is still releasing 2.6.18, yet Red Hat Enterprise Linux 5 keeps growing new kernel based features (KVM being a notable example).
This has two good things. First, it increases the quality of the patches that Red Hat applies to the kernels it ships. Second, it means that Red Hat does not have to rebase all of those patches whenever they ship the next major release (RHEL6).