> What does it say about the tech industry that so many orgs continued to use a system that was known to be broken for so long?

That they tried to scale hiring. I don't think that technical interviews are bad per se, it's the form in which they are currently that is bad. I was once applying for a company working on a stage animation software - somebody there created a task relevant to their workflow, they specified which libraries I should use and then gave me 14 days, after which I sent them a link to Github repo with the code. It was overall a pleasant experience - I learned something new programing this task, they were able to access my code style and programing abilities - but this was long before AI. They were a fairly small company though.

In the large orgs you have a HR person overseeing a hiring who doesn't know how to code (fair enough - not their job) and bunch of engineers usually far to busy with actual problems to create a problem set and far to many applicants. So companies drop leetcode at the problem - thinking that any selection criteria is better than non selection criteria.