Well, I'd argue it still isn't rational given that the testing done during the interview is usually not telling much about the candidates engineering prowess.
I probably agree with you, but I think that's a different question. Whatever metric you're using to decide which candidates to offer employment, there's a rational reason to hold higher standards if you believe you have an effectively infinite surplus of maybe-excellent candidates if you pass on the current marginal candidate.
If you don't have that endless stream, you are more likely choosing between "this candidate" against "no candidate" vs "this candidate" against "the next qualified candidate".
If you don't have that endless stream, you are more likely choosing between "this candidate" against "no candidate" vs "this candidate" against "the next qualified candidate".