I work at Google, opinions are my own.
I think your assumption that Google interviews based on what you will do on the job is wrong. The reality is that for most SWE positions, we can't assume you will know the things you'd be using for the job because of all the internal tools. Thus, algorithm interviews are more or less a proxy for some combination of general intelligence and coding questions.
I'm not saying it's perfect and there are many things I don't like about it, but I think it's important to know what the goals are when making a critique of whether the process meets those goals.