Compared to many other things, software engineering requires astonishingly low prep. Your average high school baseball player has spent more time in the batting cage to earn a varsity letter than the median SF SWE has spent on leetcode
Is there some overlap of Leetcode problems and real world problem solving? Yeah, a little but most of my time is not solving yet another algorithmic problem but thinking about the problem from a business/product perspective, decomposing it, uncovering and understanding requirements, designing code that will be easily read and modifiable by people in the future, etc. 95+% of my time on the job is not trying to figure out what's the best way to find the number of inversions of a red-black tree.
There are jobs that hard and deep knowledge of algorithms is important, for those please go ahead and keep testing people on it. The vast majority of the jobs requiring people to jump through Leetcode hoops is not that, and a lot of those interviews are not testing for what is actually needed to perform the job well.