Having heard numerous accounts of the Google hiring process, both successful and unsuccessful, I'm convinced that it serves a dual role. In addition to brining in qualified employees, I believe it's intent is to reject qualified candidates. Those qualified candidates will end up being engineering leaders in companies that Google interacts with and the more that they can maintain the impression that Google engineers are the best of the best, the easier those interactions will be and the better received Google products will be. It also means that when Google calls and invites someone to interview, they almost never get turned down.
I've turned down Google recruiters multiple times. The one time I started going down the interview process at Google for a position in London, the experience was so bad that the recruiter got the technical interview set aside (the guy interviewing me would have reported to me had I taken the position, and frankly based on our interaction, had I been interviewing him I wouldn't have hired him - that's not a good first impression), and invited me to do a second round interview.
I turned her down because I'd gotten a really bad impression of the whole process. No other company I've interviewed at have managed to be nearly as Kafkaesque in the hiring process, and several of the Google recruiters I've spoken to over the years have vented their frustrations about the process at me when I told them this, while non-Google recruiters have gleefully told me they hear this a lot and consequently see less and less competition from Google for candidates.
I'd consider a request from a Google recruiter for an interview again, but the threshold for me to bother starting down that route again has gotten higher each time - I don't feel Google is worth the hassle unless they were to approach me with something exceptional.
>they can maintain the impression that Google engineers are the best of the best
This is not true for everyone. I see it as more of a failure on Google's behalf to create a good selection process. The flawed assumption you're making is that, since they have a noticeable false positive rate (i.e. good people getting rejected), they don't have false negatives (i.e. unqualified candidates getting offers). There is no guaranteed correlation between false negatives and false positives.
To carry this a little further, I would argue that it's very likely that some bad engineers get into Google because, by definition, their selection process is not correctly picking good engineers - just a rough approximation of what they think makes a good engineer.
I don't doubt that some bad engineers get into Google...I've met quite a few. I met one engineer who believed that you should avoid interfaces in Java because it makes it difficult to click through source code in an IDE. I've interviewed ex-Googlers who were completely lost answering the interview question, "how do you write maintainable code?" From what I've seen, Google isn't testing for being able to write maintainable code and is, instead, testing almost exclusively for problem solving and being able to apply algorithms/data structures. That, alone, is going to lead to hiring some bad engineers.
But you have to look pretty hard to find those engineers...much harder than you do to find quality engineers that have been turned down by Google. And I believe it's intentional...that those false positives are about seeding the rest of the industry with people rejected by Google. I believe they interview more candidates than they need to bring in to fill their open positions in order to feed the perception (not the reality) that Google's engineers are the best of the best. That's the perception they care about, not the perception that their interview process is good at choosing employees.
If this is the actual goal they are not even bad at hiring, which I can testify personally, they are also bad to be hired at. They cannot offer interesting jobs, their hiring practice and personnel sucks, their pay is not really competitive. Who wants to work for Google if you are >30 and experienced enough? You get free meals elsewhere also.
