I'm continually astounded at the number of people who can't sort a list (with their language's standard library), clone an array, or do basic string manipulation. I've had a staff engineer at Google ask what the sleep command is in JavaScript. A senior engineer from Twitter didn't know how to use arrays ("We don't really use arrays in Scala").
I don't disagree that many companies do interviews wrong. But there's also a huge number of "senior" engineers who simply shouldn't be senior in the first place. Perhaps it's a result of companies handing out promotions to keep folks around rather than to recognize talent.