That's true to some extent, but I am quite sure even the worldest-of-class engineers have tripped up on a question or two and went on to get a rejection. If such people truly are talented then they'll have no trouble getting hired elsewhere and the companies in question would be blissfully unaware what they missed out on.

Such companies deserve to fail if so, as the supply of such engineers is limited and allegedly they need such engineers to survive :)

Think Sears vs Amazon-- which company would know what gold was if they fell into a pile of it?

I am not sure the failure of any company has ever hinged on the hiring decisions of a few developers. If you take a look into the downfall of Sears you'll see long-term strategic missteps that aren't related to recruitment in their software engineering teams.

Also I don't think a company deserves to fail if they've got a bit too much faith in a slightly flawed recruitment process. The entire point of us sharing posts like this on here and discussing them is to learn and even help each other, isn't it?

But if they’re not competent, then you’ll be stuck debugging/rewriting 6 months of the the incompetent engineer’s work

Completely agree and have been burned this way as well. If you need engineers but cant even find competent ones (something ive seen before), then the only choice is to put them on prototype work/non-critical projects