I get the impression you latched on to the word leetcode and took away something very different

FizzBuzz, reversing a sentence -- this is programming your way out of a wet paper bag, not elite and esoteric skills that need advanced study and cramming

Similar concept. You have them do some task like fizzbuzz to see if they can program stuff on the fly that they would never need to do in real life. You practice that since school doesn't prepare you for that unless you do ACM programming contests or something. The interview demands this to see if the candidate is capable of cramming for the interview, which correlates with the effort, ability they could put into the job, not with what the skills they actually apply on the job, which are hard to measure in a one hour interview slot anyways.