I think the ideal goal of an interview is to make a prediction of how happy and productive the candidate will be in the role they are being considered for. In a perfect world, that would be a collaborative effort between the company and the candidate, because they both should care deeply about the accuracy of those predictions. Unfortunately interviews often take on an adversarial/guarded dynamic that reduces the quality of those predictions. I believe that LeetCode style interviews make the predictions worse, and not only because they encourage that negative dynamic.

Even if you think that LeetCode evaluates how smart someone is, that's not what companies should be trying to measure. It doesn't matter how smart someone is if those smarts won't be put to good use. One of the smartest people I ever worked with was an amazing fit and launched the team to new heights. Another of the smartest people I ever worked with was a net negative for team productivity because he was such a jerk to people that those people would spend tons of their time and energy to find ways to avoid working with him. Despite all his smarts, he was a terrible match for the role and therefore was not productive. Being a jerk in some environments might even be a positive, but that's part of evaluating fit.