That last interview is genius. That's exactly what employers should be doing. Ask for enough from the interviewee to confirm that they're competent, but also show respect for them by compensating them for their time.

It sounds like the startup world is such an echo chamber that those running startups have convinced themselves it's a privilege to work in it. In fact, the employee is taking a big risk given startup failure rates. At this point, so many BigCos have adopted enough of the startup culture in their development departments that I'm not really sure what makes working at a startup compelling, other than Cool Points and maybe (almost certainly worthless) stock options.