I strongly disagree. Leetcode-style exercises are detached from the realities of software engineering, and signal ad-hoc preparation over actual competence and skills.
Just because you do not know how to implement a, say, ray search algorithm with optimal complexity that does not mean you cannot implement a background worker, a card with accessibility, a service which securely handle RESTful requests, etc. So why aren't you excluding everyone who is not a ray search experts from your application process? Do you seek to hire competent software engineers, or do you want to have a room of ray search enthusiasts?
I have seen colleagues do exactly that: I am fairly sure they would never pass a leetcode interview themselves, and they were not really good coders. But for some reason they really liked making candidates struggle with the one exercise they had learnt by heart.
I have been interviewed (and failed) by people I wish I could have interviewed myself right after. They were very clearly keeping the interview in their comfort zone while feeling superior and making me miserable. I am absolutely convinced that if I had had the chance to invert the roles right at the end and interview them myself, I could have made them miserable just the same.
When you are the interviewer, never forget that you are in a dominant position.