When I was a hiring manager, I specifically designed an interview process that procured me candidates that were great devs that didn't do well in leetcode style interviews, and as a result was able to hire a much better team than I should have been able to at my budget level. We did this, by doing no-brainer things like, actually reading the resumes.
But good hiring practices are hard to scale. Reading a resume or a person is difficult to teach. But a minimally competent leetcode style interview session can be run with some success by most engineers, so it scales. Which means it worked great for some quickly growing tech companies with large amounts of cash and little need to filter questionable resume lists (usually because their name brands guaranteed high level quality applicants). This then became a fad as every company copied the name brand engineering company without wondering if their hiring process had the same constraints as name-brand co, and is now what the industry thinks is 'the one true way.;