There's no rule saying you need to hire new grads. I'd even suggest that if you care about hiring "the best engineers", hiring new grads is just idiotic.
One of the counter-points of original question is that it is hostile to people with experience, aka didn’t do much also since uni, now you’re hostile against new grads.
If a grad has written no software, or has no capacity to talk software development with you, then the interview is over.