It's not bizzaro if you think like where the concept originated. It comes from FAANG size companies that do thousands of interviews and need a "standardized" way to evaluate candidates, compare them to each other. Very similar to how SAT scores are supposed to evaluate & compare millions of students.

Smaller companies should absolutely break away from this way of interviewing to find developers that can do great work for them but the pressure (or envy?) to conform is too strong I guess.