When I studied CS, data structures and algorithms was the second CS course we were expected to take, right after "introduction to programming". It would usually be taken in the second semester.
That's the last time we were tested on a long range of algorithms, except indirectly if we happened to need a given algorithm to complete our work later. In the 22 years since, I've probably needed e.g. a depth first search once, and many of the algorithms I learned I've never touched on since.
So for many, it boils down to whether or not you cared about and liked that course. I happened to love it - I read the set texts the first weekend of the course, and spent a lot of time reading up on algorithms in the years before and after. But for a lot of my class mates it was a course they had to endure to get to more interesting stuff. Many of them would go on to do very well in other subjects.
If they can't figure out a problem like FizzBuzz given a complete description, then that's a deeper problem. But a lot of algorithm questions can sound like they are on that level because we expect people to know a catalogue of algorithms that most developers don't actually need through most of their careers.