In a small company, you can tell your buddy “just have a chat with the candidate and if you like them and you think they can do the job, hire them”.

If the person interviewing your candidates messes up, you’ll know soon enough. In a large company, the bad people will take over and your company is dying a slow death.

That approach doesn’t work on a large scale. Some interviewers are too nitpicky, elitist, others approve anyone who uses the same language as them for side projects. Some are racists, sexist, or have other kinds of biases. Some might have a crush on the candidate. Sometimes the interviewer thinks about their own task while they squeeze in an interview. In some countries, “undoing” a bad hire is hard, so they need to make sure that the candidate can work on any team (or at least on multiple teams reasonably well).

IMO for large companies it makes sense to standardize the interview process.

Also, in my opinion grinding leetcode is also a good personality check for FAANG hires: it shows the candidate can suck it up, study hundreds of hours, and do whatever they need to do to pass an arbitrary test, even if they themselves think it’s a broken process. The larger the company, the more this quality matters in candidates as they will need to deal with a lot of things they will probably not like.