Replace "what city produces the most laundry machines" with "which American city is known for producing cars" and "from where domestically do we get sardines" with "what part of the United States is known for producing wine"?
Note also that there are some ostensibly hard questions that seem blindingly obvious to people here now: "Where is Korea?"
If we updated this list to include things that are relevant to today's world, I would expect that a well-educated, well-informed person would be able to answer most of these questions.
a) How good is the candidate at saying 'I don't know'?
b) Can the candidate handle repeated failures i.e., a string of "I don't know"?
c) Can they BS? Instead of leaving a blank, can they BS about something tangential?
d) Building hype around Edison. Imagine if the smartest person in your town failed to get hired. In the days of telegraph, the word of mouth would be 'only the best and brightest can become inspectors at Edison's factories.'
e) Head fake. Perhaps Edison really judged the candidates in some other way but made a big show of 'ignorant college grad' to prevent people from gaming the interview.
f) Make people that pass the test feel privileged. Its a common recruiting tool.
I think Edison was a good at spotting and using talent (yeah, using) for his own ends. I give him the benefit of the doubt on the interview process.