Earlier quoted context omitted.
Agree, but what is the alternative from the standpoint of the interviewer? These types of challenges are simple to state, self-contained, easy to timebox. For the interviewer for a say intermediate-level enterprise software backend position who needs to quickly sift through 50 applicants, what is the better option by way of code challenges?
Credentialing. Seriously. Have a Bar Association for developers. When anyone can do a few weeks of Googling and claim to be a software developer, you're going to get mostly crap candidates. Offload that process to a formal body, like lawyers, doctors, and engineers do. You can hire unlicensed developers, but you do so at your own risk. Then once you're talking to someone licensed in an interview, you can focus on jus…
I think it stems from an intrinsic starting point among many developers that programming is a true meritocracy and that all hiring questions can be settled with a judicious study of what the person is truly capable of (eg. the fabled personal github account filled with side projects). And that anything other than "hacking on the code" is a waste of time.
Of course this isn't how the real world works. In fact almost no one has the time, energy, or inclination to do impressive side projects. Gauging skills on the basis on resumes and very short interviews is quite hard and time-consuming. Hiring decisions are made on the basis of essentially social interactions and personal references.
I do think there is room for an informal credentialing process in principle, but there are longstanding mental blocks that will need to be skirted. There will need to be leadership from the top to make this happen, ie. the best, most-respected programmers will need to take it seriously first.