I strongly, strongly agree with everything you're saying and second it wholeheartedly, but I want to add that there is a class of people in our field that can talk brilliantly about what they've worked on, who have resumes with key roles on shipping products on them, and who will absolutely flatline if called upon to code. There is a logic to some level of programming quiz. You really want to verify that the person you're hiring is capable of sitting down, focusing on a problem, and turning out some reasonable facsimile of good code.

That said: this site clearly doesn't look like the right way to do it.

Here's our hiring process (we're hiring!):

http://www.matasano.com/careers/

I think we're extraordinarily careful to be respectful of people's time. We've learned through difficult experience to put practical problems in front of candidates, but to avoid Aspie-type alpha-geekery in those problems, and to be appreciative of the time people give us to go through those problems.

Running the puzzle gauntlet doesn't sound respectful to me. There are great programmers who get off on solving puzzles and this process may not weed them out, but there are lots of other great devs who will walk if they see something like this. Caveat emptor.