I'm a developer with about 6 years experience in full stack web app development (Rails & Django mostly), and I recently got my ass absolutely kicked during a couple of live coding challenges that were very heavy on theory (also worth mentioning that I'm a self-taught dev without a CS degree).
I started talking to some former coworkers about my experience, and I got 2 main responses: A) it's imperative to have a CS foundation regardless of your degree if you want to advance in your career, and B) employers only consider prior experience to certain degree.
The two interviews that I bombed involved heavily contrived coding challenges that tested CS fundamentals in ways that I've never encountered in a professional environment, so it doesn't surprise me at all to see services like this popping up.