I have definitely seen senior developers put quadratic and even exponential algorithms into production and cause global outages. Code review didn't help, because their code was reviewed by other people who were interviewed to the same low standard. I continue to insist on algorithm & data structure interviews for software engineer candidates. Not every project needs them as much, but in large enough institutions, eve…
I strongly disagree with this assertion. Using algorithms&data structures trivia in interviews means you will reject candidates who might happen to fail a inane trivia question in spite of otherwise being perfect fits and the ideal candidate.
Imposing trivia on algorithms&data structures as a requirement communicates the idea that you don't believe anyone, including the ideal candidate, is unable to learn and develop this skill while working at your organization. This is telling regarding the bar which is set at your organization to nurture development in this skill set.
If your org is indeed large, odds are you can find a subject matter expert within your ranks, which means it's utterly pointless to expect your engineers must be able to come up with perfectly optimal solutions on their own. They are a Slack message away from that.
The biggest blindspot you convey in your post is the ladder-pulling aspect of data structures & algorithms in today's recruitment process. Subpar engineers use it to depict themselves as competent or raising the bar within their organization by coming up with obscure puzzles that bear absolutely no relationship to the job they are hiring for. They spend days hand-picking a problem for which they have a solution to, they go over the problem as many times as they need, they proceed to grill candidates on this trivia, they make their hire/no hire decision on the 20minute performance a candidate has after being presented with a riddle, and then go back to not have to face that issue ever again in any production setting.
The worst offenders are interviewers who pull this stunt in spite of they themselves completely failing to understand their own problem.