Earlier quoted context omitted.
I think the other reason O(n^2) is a "sweet spot" is that it often arises from one O(n) algorithm calling another O(n) algorithm in each iteration, resulting in O(n^2) overall. Very often it's ultimately because the inner O(n) algorithm should have been implemented as O(1), but nobody bothered because it was never intended to be called in a loop.
I often see O(n^2) algorithms that can be reduced to O(2n) at the very least. One of the best things I gained from school was the red flag that fires off in my mind any time I see a loop nested in a loop.
[EDIT] it also makes you hesitate & second-guess and worry and experiment a bunch when contemplating using a recursive algorithm, which is deeply counterproductive in interviews where the expected behavior is so often "apply recursion, instantly and without hesitation" :-)