My last company had a screening coding problem that was designed to take around a day (although it didn't have to; when I did it as a reference point, it took a couple of hours). I was always kind of astonished how many applicants were willing to do the whole thing, given, as you say, that they often already had a full-time job and/or were applying for multiple positions.

We always gave really extensive feedback on it, partially because one of the things were were looking for was how people would react to that feedback (I was generally surprised at how many people got defensive about fairly objective observations/questions).

Overall I think it was quite a good data point. It was nice to have a more low-key and extensive complement to the more stressful live whiteboard interview (yes, we did have one of those, and I still think it was useful).