The people complaining are usually the ones who can't just prep for algorithmic interviews with a couple hours a day of effort for a month.
Which makes the algorithmic interview a relatively good filter - ability to learn something difficult quickly is a very important skill at high performance software companies.
When you're paying someone to solve problems for 40 hours a week, assessing them based off if they're willing to do that in their free time seems naive. It's surely a safe option, but you'll miss a ton of qualified talent, and potentially not grow fast enough because of your hyper-idealistic expectations for what it means to be a software engineer.
Speaking as a parent, the idea of having “a couple hours of free time per day for a month” to learn difficult new material is laughable, and it has nothing to do with intellectual ability.
Then try 1 hour every day for 3 months, or 1 hour every 2 days for 6 months, or whatever you can fit into your schedule. Do you really have no time at all after your kid(s) go to sleep? I prepared and interviewed with a 1 year old at home, it was challenging but doable. Your situation might be more complex than mine though, I wouldn't know.
How about taking a few days off to prepare for interviews?
I mean, you're going to spend 4-5 hours per day for each of your onsite interviews (plus an hour or two each for recruiter calls, phone screens, etc.), so if you have zero free time, interview prep is probably the least of your problems...
Which makes the algorithmic interview a relatively good filter - ability to learn something difficult quickly is a very important skill at high performance software companies.