That may or may not be a good thing, depending on the situation. But the downside is that the company would lose out on the potential applicants who can demonstrate skill in interviews, are in high demand, and can't be bothered to spend time on take homes.
Like actual day-to-day work, just give me a prompt and a recommended time limit and I'll try to fit it to that and I might go above and beyond depending on a number of factors.
It's a situation where you have to pick your poison as an interviewee. Either subject yourself to the stress and lack of meaning that is leetcode (just my perspective), or be prepared to waste a few hours of your life on a project that doesn't wow your potential employer. I'd rather take the latter and hope I can learn something valuable along the way.
But I totally agree with your point. I think that if a take-home project goes over a couple hours it should be paid. Some companies do this, but not enough.