That's a problem with the company. We at @cdr pay interviewee's $200 for their take home challenges.
This is awesome. I have taken a number of code challenges and walking away with neither, compensation nor explanation is rough.
Then pay the candidate! It might seem ridiculous but consider how much time is spent by interviewers, hiring committees etc, giving some fraction of that out even to utterly worthless candidates might not be the worst idea in the world. A side effect of this is that suddenly the cost of a bad screening becomes more intuitive
That would create the wrong incentives.
"What do you do for work?" "Oh I just interview a lot, the pay isn't amazing but it is what it is"