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Why in the world would anyone be interested in doing this? Companies are competing for talent, not the other way around.

Because there are people out there looking for work. It's not trivial for all programmers to find a job. I am in particular really awful at the entire applying and interviewing process (except funny little algorithms problems, I can kill those). It's a stressful, amorphous blob of everything I hate.

What the parent of your comment describes sounds a lot like a specific kind of contract-to-hire, which if it's done well can be really effective. I get to show off that I can actually develop software well, a company gets to judge me on more than just an hour (or maybe a day) of questioning.

Unfortunately it can be pretty exploitative if done wrong. It's easy for it to become an unending period of low-paid work where you're just hoping that one day it'll turn into a real job.

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