We are a small startup, currently with 11 people. You are right about the scaling issue, I suppose our approach would be more difficult in a large organisation. But why would we only be able to hire unemployed people or new grads? I joined this company myself when coming from another job, as did a colleague that was hired later.
Proving why an engineer would want to work with us is exactly why we interview with this system of two try-out days. How can we possibly convey that we're doing cool stuff in a one hour talk around the table? Besides, we think the try-out is not only for us to "judge" the candidate, it's also the ideal time for the candidate to see if he fits our culture and way of working, and if he actually likes what we're doing. Hiring someone that decides to leave a month later is waste of time for all people involved :-).
Of course we also do the regular "around the table" interview before we invite someone to work with us for two days. We have a chat of about an hour, tell the candidate we will contact him and then have some internal discussion. If everyone agrees we invite the candidate for a two day try-out. If we feel the candidate fits our company and we like his work, we usually try to make him an offer on the second day.
Concerning our stack: it's all Ruby and Rails, and a lot of Amazon Web Services. Our engineers all have at least 3 years of experience with Ruby and Rails (or similar) and we are usually only looking for somewhat experienced people. We simply don't have the time nor the budget to train a new hire for a few months. To get going on a try-out feature a candidate usually only needs Ruby, git, an editor and a small introduction to our codebase from one of the engineers. Most of them are productive within two hours of entering our office on their first try-out day. Of course these try-out features are very isolated and require little to no background knowledge of the entire codebase. Once the candidate is hired we will take sufficient time to get him comfortable with the code.