Well, it definitely serves a strong filtering mechanism to find people who have a certain level of probably-going-to-behave-in-ways-you-expect when you're trying to hire. Whether that leads to the most optimal outcome is not always clear, but it seems reliable enough (though boring) that many use it as a filter.

We don't have great alternative mechanisms to find employable people otherwise, and given the current unpopularity of standardized tests / uniform measures of performance or skill, what can an employer do?