So, I've never been involved in hiring, so I have no perspective on the state of the job market. However, I have trouble believing that anyone who would be willing to rep themselves as a "C Developer" couldn't write this particular piece of code in a manner similar to the author's solution in a matter of minutes. Do these FizzBuzz articles keep getting promoted to the front page to boost everyone's collective egos, o…
Also, when you're hiring, you're getting a skewed picture of the overall programming population. Suppose (to make the math easy) that there are 100,000 programmers in the world, 90% of which are employed. So that leaves 10,000 programmers in the candidate pool. Most of the top 20% of those will be able to get a job from a referral and not go through a "normal" hiring process, so if you're screening resumes you're now down to the next 80%. But that's the bottom 80% of the 10% that's looking for a job. Of those, some are competent people between jobs or looking for a change, but a lot of them are just in the bottom 10% of the overall skill level, are basically unhirable, and are semi-permanently on the job market because of that.
To make another simplification, if you and I both screen 100 resumes in the same area, there's a reasonable chance that the 10 best candidates we see are different since they go off the market so quickly, but that the 10 worst candidates we see are the same, since they stay on the market. And unfortunately, some of those totally unhirable people have good-looking resumes.