The distinction for interns is that there is a definite end to the internship, no harm no foul. An employer can easily pass on every intern that is not a perfect fit without tarnishing the interns' reputations. That allows a less restrictive filter to be applied in selecting interns.

I think it's effective for college candidates. You pay them much less, they often work on greenfield projects where learning existing code/process is less important, and the company gets to try out more candidates than they end up hiring. All of that while still doing right by the candidates.

Let’s say an internship increases the chance of your getting a good hire from 50% to 75%. In that case 10 weeks will pay for itself.