Probationary hiring also doesn't work that well for many candidates. Despite at-will employment, there's an understanding about W2 white collar employment that gives new hires the confidence to buy and sell houses, move across the country or around the world, terminate talks with other prospective employers and pause interviewing, etc. This is a cultural thing that could change over time, but it would be a significant change.
I actually did end up hiring a W2 employee who didn't work out. He moved cross country for the job too.
Let him go after only a couple of months--but that was several months of pay that produced literally no positive results. And I was running a small development house at that point; dumping two months of salary down the drain was not a good thing for the bottom line.
So yeah, totally agree. Paying everyone who "seems good on paper but who just can't pass the programming test" really doesn't work, despite wishful thinking to the contrary.