The reality is that there are some jobs (a small minority) at these companies that require incredibly deep algorithmic knowledge - they really do do some complicated things.
But the majority of jobs at TwitGooFace are your run of the mill programming jobs, where the requirement and the reality don't call for anyone at that level, and hiring someone at that level is just going to make them bored. Indeed, the vast majority of people I know at these companies aren't algorithmic encyclopedia, they're just solidly competent engineers.
Having worked at a "AAA" tech giant and many more places across the country, I'm happy to report that for the most part there's nothing exceptional about Silicon Valley jobs and what they require. For the most part, barring a minority of highly specialized high-level positions, engineering ability trumps computer science knowledge.