I always pondered about that when I was at Google. We had mostly smart people, but I argue not all of them were the perfect fit for the position/skills needed.
Sure some bias are best eliminated such as what school they went to, but if work experience in general should not be discarded completely in my opinion and you can only get so much out of standard algo/DS questions, especially considering these days everyone is studying for those like standardized tests.
I literally know some CS students who just did hundreds and hundreds of practice problems and they'd ace most big company algo interviews but that doesn't really tell me if they'd be good engineers in practice at all.