How did you arrive at this conclusion? I can easily imagine that this process is so laborious that plenty of people don't even submit anything. Like the person who wrote about this on reddit. -- Now what reason would we have to think that the people who don't want to go through the process would also be 80% good? This may be a very valuable filter for Canonical!
In practice it's not like this though, it's probably true that < 10% of what goes on in most interviews actually differentiates candidates.
I think part of it is it's just hard to figure out which 10% is the useful part. Though certainly if 80% are passing an early step in the process, it should just be scrapped altogether.
(If that sounds absurd, it is and this funnel is broken as hell.)