To take a more nuanced view, I think there is an important distinction, frequently lost, between "can't code" -- which is all too common in practice -- and "can't easily code a stream-of-consciousness solution to a synthetic problem unrelated to anything I've ever built". Or its close cousin "can't easily code a toy solution to your toy problem since I've only worked on massively scalable versions of the same problem…
This really seems out of necessity. There are going to be a lot more qualified median engineers rather than superstar coders, so it makes sense to optimize your hiring pipeline to assess these folks.
In my experience, most of the "top 10%" hires are either through interpersonal contacts or a fast-tracked interview process for a specific candidate.