My pet conspiracy theory is that leetcode is used to exploit imposter syndrome in candidates. After going through an hourlong session where you came up with the less-than-optimal but correct solution, I think it's easy for the interviewers to seem "disappointed" and lowball the candidate with a worse position/salary.

I think this partially explains the phenomenon of external candidates at Google entering Google at the college-hire tier when they may have been repeatedly promoted at their prior employer. Of course the comp is usually more so it's not a big deal...