[ramanujam]

It is true that having it as the only option to apply for the job or even having it as a totally separate option wouldn't be the best idea.

I can see this as a useful tool for pre-phone screen or post-phone screen evaluation. At the startup where i work we do send the candidate a small code problem after the phone screen and before the on-site interview. I know lot of companies do that. Gives you a little more insight about the candidate and also ensures that you are not wasting your teammates' time as well as the candidate's time.

Also, submitting the resume/github link along with a solution to a programming challenge increases the probability of getting to the phone interview stage. Highly applicable for famous companies like FB or twitter where they receive hundreds of similar applicants every day. Of course it is a stupid method if you are trying to hire a team lead or senior engineer but for fresh graduates or junior developers it works well. I don't think they will mind spending an hour solving a problem.