As imperfect as ALL technical recruiting styles may be, at least a short coding assignment (i.e. < 4 hrs) is halfway-related to the real world. I have written code against a set of requirements nearly every day of my professional career. Outside of the interview context, I haven't balanced a red-black tree since I was in undergrad over 15 years ago. Frankly, whenever I hear people favoring the latter over the former, I always assume that it's just because they're fresh out of school themselves.
Yeah, doing dozens of homework assignments for multiple companies could be a massive time sink. However, I've almost universally felt like I wasted my time when going through the interview process with companies who don't use them.
Perhaps my perspective is a bit colored, as I'm far enough along in my career that I can be choosy about which companies I invest time in. I only talk with a dozen or fewer companies in each job search, and so I won't do a 4-hour homework assignment unless I'm already interested in working for you. If I were closer to entry level, and therefore had to go through the process with a hundred companies to land an offer, maybe I'd have a different opinion.
Regardless, the original post here is some entrepreneur, writing a small novel about his lengthy process of figuring out which job title to seek at a real company ("CTO"? "VP"? "Architect"? "Principal"?) Of course it took him 200+ hours to get a clue.