Leetcode interviews only became popular because FAANG needed a somewhat objective way to weed out large quantities of applicants in an initial round. In this context, and as part of a broader interview process, it somewhat makes sense.
But then of course, since FAANG did it, everyone else jumped on the leetcode bandwagon and started asking ridiculous DSA-exam-type questions that had nothing to do with their actual work, even if they had the capacity to conduct proper interviews for their candidate volumes.