First, this model alone doesn't scale. Big companies interview hundreds of candidates every week. It's not possible to design and evaluate a weekend project for each one of them. This doesn't mean that they can't have projects, but early filters are needed. That leads to the classic phone and F2F interviews to rule out those who can't code. If you freeze in one of those because of the pressure, you're out.
Second, for simple developer positions, such weekend projects might be very good. But if you are trying to hire a senior developer who is going to solve problems at big scale, then the ability to create a simple movie catalog doesn't tell you anything. And there are no big scale weekend projects. You have to ask about algorithms, data structures and other CS topics. These things are important!
Bottom line, this is a nice hiring technique suitable for small companies at a small scale. But it might not be that useful for big companies.