Nobody happy with their pay and job is going to grind leetcode.
They could just ignore leetcode and ask puzzle problems instead to test ability.
One of the hiring fads before leetcode was to ask puzzle questions, with a heavy emphasis on Fermi questions and trick questions. These had the same failure modes.
It turns out that hiring is hard, involves some risk, and always tends to illustrate Goodhart's Law: whatever process you put in place to avoid that risk will ultimately become worthless when people start optimizing for it.
I'm not going to grind leetcode regardless of how happy I am with my pay and job. I have very strong objections it. If a company requires it, I take that as a pretty strong signal that I won't get along well at that company.
In fact this is how you become "smart" - some talent and a lot of hard work (grind)
Hmm. I think this is a different definition of "smart" than I'm used to. I would say that some talent and a lot of hard work gets you "skilled", not necessarily "smart".
Skill is a form of "functional intelligence", where skill = talent + grind. The more talent, the less you need to grind, but combined the two are killer. To me, "smart" where the grind is 0 is not "smart", but just "lucky" (born with talent)
However, I agree with the general sentiment that almost nobody is doing the research to ensure their interview process selects for the things they actually want.
2. Its not a hamster wheel because you get a high paying job for your efforts
These companies don't want an employee who starts to question "why" things should be done or why things are important. Demonstrating that you are willing to apply yourself at something objectively useless simply because you are required to is a huge plus.
Grinding is a poor proxy for work ethic. It is a good proxy for submissiveness.