It's the result of making IQ tests for jobs illegal. Leetcode and the trick questions asked in finance are just IQ tests in disguise. You can't regulate your way out of the market - if companies want smart people they'll find a way to hire smart people.
IQ tests for employment are not inherently illegal. It’s only illegal if whatever you’re testing has no bearing on the job so as to be used as a proxy for discrimination.
So a job that involves complex problem solving in unique situations would be perfectly reasonable to have an IQ test qualification. But not for something like sweeping the floors or working the assembly line in a meat processing plant.
Difference with trading though is someone is a great trader at one hedge fund they can jump ship pretty easy without hurdles. In fact they compete to get good traders.
For Software Engineering you have to jump through hurdles each time even if you have accomplished a lot at past jobs. I might be wrong but it feels like there are far more Software Engineers compared to jobs than 10 or 20 years ago.
Granted not all software jobs as the last one I got I just had to interview a CEO and show my portfolio. Seems like the algo challenges are really geared toward Silicon Valley but not it's ending up a lot of tech jobs.