alt Hacker NewsLeetcode's utility is not in showing you can solve real-world problems. It's used as a baseline to estimate how smart you are. Every shop prides itself on hiring smart people, and some only want the best of the best—your MIT and Stanford grads, etc. A smarter engineering workforce can not only solve the problems you have, they're better positioned to spot and avoid problems you haven't anticipated yet. Anyways, IQ testing as a condition of employment can open you up to legal liability, as IQ tests are horribly racist. Leetcode is a way around that.
Without commenting on the racial biases of IQ tests (we probably directionally agree), the idea that IQ tests in employment are legally risky is an Internet myth. The companies that offer employment-screening general cognitive tests have logo crawls of giant companies that use them.
They're not unusual because they're legally risky; they're unusual because they don't work well.