You should consider hiring people because good candidates are hard to find. And if you want to know whether or not they're a good fit for the position, engage them in a conversation and ask. Don't expect applicants to do your job for you, the good candidates have better things to do than write you a letter before you even bother to talk to them.
You can increase your chances of getting hired at a specific company by tenfold of you focus your efforts. Usually this means getting to know people at the company, understanding which departments and projects you may fit.
For example, I am a graduate software engineer. There are a lot of companies that I have a more than sincere interest in working for - I have a near obsession for working for, say, Google, Amazon, Dropbox, or Facebook. I also have a desire to pay my bills. All 4 of the above have rejected me for "lack of years of experience," and so now what? Find more companies I sincerely want to work for? At this point, a company with a software engineering team I can learn from fits the bill, of which there's probably 3,000 in the Bay Area alone. So, I don't understand how my options at this point are anything other than literally sending out 3,000 resumes (I'm at 80 now). Other than, of course, extensive networking, which I also do.
Are you honestly sure that writing a cover letter is a good signal?
The standard advice is to submit a cover letter, so many standard candidates spraying applications do. There's someone just a few comments over who wrote 53 cover letters when applying to jobs.
You still think cover letters are about focus?
I absolutely agree with your last sentence though. Bypassing the initial resume screen by talking to an actual engineer makes far more sense, but frankly you don't want to be too aggressive about it because then random people will start pestering your engineers all the time just to be considered.
That's me, we're in the comment chain for it right now. I don't understand what else I can do to get a job as someone a.) new to the city and b.) a graduate software engineer with no prior experience other than personal and group projects. None of my "passion about" companies will take me - dropbox rejected me in 30 minutes flat, probably automatically. What can I do but spray out absurd amount of resumes? What can I do but have an auto-generated cover letter that swaps out COMPANY_NAME and JOB_TITLE so I can crank out enough resumes a day to ensure I get a job before my bills swamp me?
You can increase your chances of an interview marginally through a significant investment of time, but you'll get more interviews by spraying resumes. Especially good candidates with valuable skills.
I consider the cover letter important when I'm a hiring manager. It shows that you're interested enough in the job to try for it, to make a bit of effort. I've never been in a position where there were few enough applicants that I could have a conversation with every one of them - the cover letter is a brief of their half of that first 'why should you work here' discussion.
My opinion goes the opposite way when I am being aggressively recruited. So, I think it's on the person asking for something (to be offered a job, or to leave a current job) that should be showing their willingness to make the sale.
Again. That is your problem to solve, not theirs. Good candidates don't need to worry about making sure you see them, they'll either just work for a different company where they happen to have more friends or they'll bypass the first line hiring process entirely by calling up a colleague and telling them to make sure whoever is doing the hiring bothers to call them back.
I always thought that the resume should explain why someone would want to hire me ("look, I'm smart, know some stuff, and did some cool things!"), while the cover letter explains why you in particular want to hire me.
I had very good look writing cover letters where I pulled apart the job description and explained how my experience (described on the attached resume) fit with each of the requirements.
And no, I did not write cover letters. A short phone / email exchange usually told the company if I'm an on-site interview material, and equally told me whether the company is worth being interviewed with.