This strikes me as no worse that the traditional approach of hiring recruiters and HR people to processes thousands of CVs and sit through hours of interviews.

This strikes me as no worse that the traditional approach of hiring recruiters and HR people to processes thousands of CVs and sit through hours of interviews. The engineers have a route to distinguish themselves, they get well rewarded in the process, the big companies get the talent they want and society runs lots of experiments in the marketplace as a result. Only only downside I can see is that a particular valuable service may get shut down, but at least the model has been proven and someone else in search of an idea could emulate it (think etherpad).