One data point... Senior engineer that founded the local java user group and wrote a published book on the java language. Couldn't code a simple reverse string algorithm, nor explain whether, after with help devising an answer, the method was thread-safe.
Another data point... A self-described expert in SQL with it all over their resume. Couldn't write a simple join, inner outer or other.
Weed-out questions exist because our industry is flooded with people who don't know, nor care to know, their craft. And there are plenty of employers who continue to hire these people, and promote them. I interviewed numerous "architects" (with development experience all over their resume) who couldn't come up with a naive solution, let alone the optimal, to a very simple problem. Want to fix the interview process in our industry? Figure out a way to weed out the liars? I'm all for it. I would rather not have to do basic algorithm questions, but that's the current environment.