I think Google set technical recruiting back a few decades. Their process is and always has been ridiculous, but because they are so successful, everyone is copying it.
I propose that Google is successful in spite of their vaunted hiring process, not because of it.
Google's process seems to have two parts: very tough interviews designed to produce false negatives in exchange for almost no false positives, and the necessary reputation, benefits, and pay to attract more than enough talent. The problem is that most companies manage to pull off the tough hiring process, but don't have enough of a funnel to filter through.
To be fair, before them it was Microsoft. I worked at a place once that brought in a few ex-Microsoft execs and managers, and the end result was a dev hiring process that worked roughly like Microsoft's - despite us not having access to the same size of talent pool or really needing that many high-end engineers.
The end result was that we ended up having a harder time hiring, missed out on some good people, and hired some people we shouldn't have - all because we were hiring for Microsoft, not our organization.
Unfortunately, pretty much any high-profile, successful tech company will have its hiring methods replicated, even if they aren't a good fit for the company that is borrowing them. Hiring is one of the most important aspects of running a company - effectively outsourcing that responsibility via rote copying of another company's methods is a mistake.
I think Google's process is great. The result of the process is a bunch of people that are very easy to work with and smart. I never even have to think about rephrasing something or explaining it more simply; everyone operates at or above my level. The result is a very stress-free work environment where a lot of work gets done quickly. (Except when Google decides to buy out a ski resort and send us there for a couple days. Less code being committed then :)
The process does produce many false negatives, but that's much better than false positives. Hiring one bad employee can make many people miserable. Not hiring one good employee only makes one person unhappy. And they can interview again anyway.
The same thought occurred to me. Perhaps Google is like Lake Wobegon, where everyone is above average. :)
But a kinder interpretation is to note that there is a kind of threshold of intelligence which, if most everyone is across it, makes technical communication much easier. This fact mixed with (false?) humility to yield the mistake.
I think the problem with this attitude is the assumption that what you are filtering for, which for the sake of this discussion is called 'intelligence', is the sole scalar factor that makes an employee great.
Haven't we all worked with that guy (or gal) who can't explain things as succinctly as the great, super-quick-witted double-800 SAT guy, but who has something different, a creative spark, a way of thinking outside the box? To assume that that character is simply a 'false negative' that an organization can do without, I think is very naive.
It comes down to risk and reward. Google has a proven business model; maybe they don't need that extra something that is worth the risk of a few non-performers. Or, as I suspect, that spark comes mostly from people who ended up at Google through acquisition, or the few who have reputations that allow them to bypass the traditional screening process, or they were just there at the beginning before the process was so ironclad. Or they got lucky and the interviewer liked them and gave them a bit of a pass.
TL; DR: Do you really only need an army of facile, confident test-takers who are good at making first impressions?
[Addendum: it occurs to me that if you are as large as Google, you can accept a process that only produces 0.1% (or less) creative geniuses (because lots of false negatives get rejected). You may even prefer to keep that number small but non-zero (a surfeit of true creative geniuses has its own problems). But is a ratio like 1:1000 the right number for a 20-person startup? I think the dynamics are much different at a small company. Let's remember, Google is not a startup, they are one of the largest companies in the world.]
I propose that Google is successful in spite of their vaunted hiring process, not because of it.