And therefore you are not an employee they want.

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.

1. Learning algorithms and practicing leetcode is not actually useless. A deep knowledge of algorithms falls under the category of high value knowledge that is not frequently needed. Its still high value when its needed and you cant predict when it is needed.

2. Its not a hamster wheel because you get a high paying job for your efforts

My sentiment too. These Leetcode style websites will take an algorithm and then come up with a contorted problem that can be solved with that problem. Often the problem is not even worded precisely but people who have been wasting time on solving random problems can see the patterns apparently.

Weeding out candidates who aren't willing to ride the hamster wheel is a huge point of leetcode.