It all started in a few years earlier. Google had determined that there was a strong correlation between understanding fundamental computer science and being a strong software engineer, so they began testing for computer science fundamentals. At the time lots of companies were trying to mimic Google's success and it quickly became an industry standard. People began just studying how to answer these questions. The population of people that are good at these types of interviews shifted from hardcore detail oriented programmers with academic backgrounds to mostly people that spend time practicing leetcode style questions.
One of their hiring criteria is cognitive ability. If it correlates with strong proficiency in CS algorithms, then this might have been why they focus on it when hiring engineers.
(I am not saying that this strong correlation exists.)
The correlation doesn't exist. A large segment of the Leetcode-uber-alles practitioners are also the ones that are obsessed with total compensation as the ultimate measure. It was a mistake by google and others to focus purely on this , but we are where we are. Many of the leetcode fanatics can't deal with real world issues in software or operations.