Just have the candidates use their own machines.

We tried inviting candidates to bring their own laptops, and it turns out often they didn't _have_ laptops - or we'd tell them there was a Java-based test and (perhaps due to a miscommunication or because this is an uncommon interview practice) they'd arrive with a laptop without a working Java VM or compiler.

Needless to say, you can't objectively compare two candidates' progress if one of them spends half the interview trying to get their environment set up!

  Regarding security practices... come on. [...]
  These are simple engineering problems.

Perhaps I wasn't clear: My employer is a medium-sized company, and consequentially IT security is actually a complex political problem rather than a simple engineering problem.

You've also made a pretty big shift in the goalposts there, from asking "why don't companies have candidates accomplish the thing they're assessing?" to asking "why don't companies have candidates accomplish the thing they're assessing, and perform remote video interviews, and have the ability to give spin up clean AWS environments and give remote semi-trusted interview candidates access to them?"