It's also for liability. If someone comes in with the intention of suing them, they can point to the test and have objective evidence that the rejection was not based on race or gender. It also allows them to gather data after the employee gets established and succeeds or fails.

Also in the mid 90s, you actually had to be smart to work in this field. There was no stack overflow or reddit to search. And CS programs were nascent.

Companies certainly have taken it too far, but I don't blame them for some usage of standard tests.