As I see it, the difficult algorithm interviews screen for people who are motivated enough to spend 100s of hours studying for an interview, or know this stuff for some other uncommon reason. Both types are acceptable hires.
Personally, I'd rather not work somewhere that hired based on drilling fringe information - what will the job be like? Maybe I'll feel differently in 10 or 20 years
I would hope so, because I do all those things and, after over a decade writing software, find the ability to solve puzzles almost completely useless for most coding I've ever done. But reality doesn't need to make sense. So, if you want to work for Google or Facebook, learn puzzles anyway :)
That may not be necessarily a bad thing, depending on the position of course. But projects are not the be all end all, at least not in my company, and where I interviewed.