From reading the Reddit post, I think it's the combination of a take-home assignment
plus the standard on-site whiteboard test battery that the OP was arguing against, and I admit I'm sympathetic to that. I remember interviewing at one place a few years back that had a relatively complex at-home assignment -- you had to write code that would hit various URLs that would return a string containing a long basic math formula (e.g., "1234-(3529
(42-34)/2)+45", but going on for ~60 characters), write code that would parse that string to produce the result, then hit another URL pointed to by the result, while treating all the results as a node graph you needed to find the shortest path through. Granted, I'm one of those annoying self-taught programmers without a computer science background, so I probably found that a bit harder than someone recently out of school with these algorithms fresh in their mind -- but I got through the challenge correctly, wrote pretty nicely-structured and commented code to boot...which was, as far as I can tell, completely ignored* by the interviewers, who just asked me more on-the-spot algorithm questions instead.
I've been at other interviews in which the on-site interview is a walkthrough of the code I'd written, asking questions about why I made various choices. I think this is really a much better way to do programming interviews. It still weeds out people parroting code without understanding it, but it's a better example of what a candidate's actual code looks like -- and for the vast majority of programming jobs, that's probably more important than whether they've memorized algorithms that rarely come up outside other whiteboard tests.