I second this. I just graduated and as I was looking for a job and I interviewed for a bunch of companies.

One of them asked that I solve some programming challenges. Sure, I like puzzles and I like being challenged. However, at the time I was already being challenged by my thesis work, problem sets, interviews... it's hard to agree to make a huge time commitment just to get the right to a first round interview.

Since other hot startups/ cool companies (Google, FB) don't require this type of activity, it makes sense to me to think that a lot of people simply won't have the time to apply because they're busy solving more interesting puzzles.