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To me, the rationale behind interviewing by programming puzzles seems to be: the candidates who pass are either truly smart to be able to solve the problems on the spot without preparing or diligent enough to have prepared for them.

As such, puzzle-based interviews are optimised to reject candidates who are not smart enough and have either not bothered to play the interview game or those who don't have what it takes to learn to play the game.

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Draw a Venn diagram of your conclusion. the smart people who cannot be bothered to play these games is the biggest segment. They're busy getting shit done.

Maybe those people would actually not succeed in Big Tech.

There may be a certain amount of "plays the game" necessary to succeed in one of these roles. If your first thought is "well what I would do for these companies is better than what they would want me to do", then that's exactly my point point---They may actually care more about your ability to take orders than about your ability to solve problems independently (even if they say the exact opposite in their culture talking points).

Is that optimal for the company over 100 years? I don't know. Is it even possible to know?

Just speculation.

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