Not to get too meta, but what if the company essentially buys your argument? "Yes, this is a non-real world problem for entertainment purposes only..."
But they want to find programmers who find such problems entertaining.
The problem with puzzles is just that. You ask questions and hire candidates based on issues that have nothing related to the job. The end result is you up hiring the wrong people and then say you can't find good programmers.
You can't find good programmers because you are not asking questions meant to hire good programmers. You wanted puzzle experts and that is what you got.
http://itasoftware.com/careers/work-at-ita/hiring-puzzles.ht...
These aren't classic Microsoft "puzzle questions". They are programming challenges that say a lot about your approach to programs and problems. In particular, all of them ask you to make tradeoffs between correctness and performance.
They are cool enough to attract engineers, hard enough to discourage the idly curious, and unique enough that no published solution exists. That's why I said that someone who does this kind of puzzle for the sheer enjoyment of it might be exactly what a high-level software shop is looking for.
Would I want a "puzzle expert" who could solve the problems on ITA's page? Hell yes.