For many people, their current job might not allow this (this is true especially for those who are on visas). Also, many people might not want their current employers to know about their job search, and using a week of their vacation time for an audition project with uncertain reward, is just not practical for them.

I think the audition project is a good idea for people who don't have restrictions like the above, but should not be used to reject those for whom it doesn't make sense.