Apparently it was not homebrew; here are a couple articles saying that he rented the equipment from the phone company. So the dial-a-joke thing might have been entirely legit.

http://www.wired.com/wired/archive/6.09/woz.html

http://www.woz.org/letters/pirates/07.html

I'm guessing that when the article describes the dial-a-joke service as illegal, it's confusing it with his blue-box antics, which occurred around the same time. According to the following article (a fun read), the blue box preceded dial-a-joke; he got the inspiration for the service from a dial-a-joke line in New York that he called while demoing blue boxes to potential customers:

http://www.atariarchives.org/deli/the_merry_pranksters_of_mi...