Take a look at how things worked before (and still do): employers decide who get jobs based on a combination of personal biases, nepotism, and ulterior motives while applicants present distorted versions of themselves and network/pull strings to put the odds in their favor. That seems more problematic.

You would be surprised at the process in other industries. What you are describing is the tech job market specifically.

Other fields have their own problems, including credentialism and ballooning concomitant student loans, but do, by strict convention, not hire based on vibes or pulled strings. Often to their partial detriment, as the cure -- ie, strict oversight of hiring that also forces the hiring manager to ignore important implicit signals -- is alive and well in medicine, law, civil engineering, education, and the trades. Notable exceptions include entertainment, sales, real estate, and software engineering.

By optimizing for vibes, the tech industry gains "Spidey senses" in the hiring loop but pays for it in impartiality.

IMO this precipitated the DEI movement's advent, as it was seen as a way of remediating the drawbacks while preserving the information channel.

Without it, expect either homophily, and, eventually, a harsh and remedial credentialism.