It’s also very subjective and hard to train for or to audit externally. When a company gets too big, you can’t properly vet hiring personally anymore, so you have to scale it.
You don’t want ‘bozo cliques’ to form, so you make a semi-objective process like ‘solve this algorithmic question’ as part of the interview loop. I think execs and the founders doing a final review before hiring all engineers comes from that fear.
Then other companies cargo cult interview processes from larger companies and the trend propagates.
If you want to ‘hack hiring’ as a smaller company, you should use hard to scale processes like the one described in the parent post.