This argument never holds up. Being a doctor or an engineer is almost always thought of as a good path. But what if everyone was a doctor or engineer? There'd be no one left to do basic tasks in life and the positions available for doctors and engineers would be so in demand that these people would work for very little.
Your point can be rephrased as, "What if everyone ignored the realities of the job market?" There's no danger that everyone will do that, so there's no need to use ethical or other philosophical arguments to discourage it.
On the other hand, spamming or otherwise misusing email to deliver your unsolicited "message" at everyone else's expense is a classic instance of the Tragedy of the Commons. There is no incentive for any individual actor to do the right thing. Kant's categorical imperative is one of several reasonable ways to think about it.
I tend to be more enthusiastic about my job when I leave something for tomorrow. Like a "To be continued" episode that gets you hooked, if I leave at the end of the day with something to finish the next morning, I look forward to it much more than if I push through and get it done before leaving.
I also find I'm more interested in my job when I take a little time each day (15-30 minutes) to read a programming book about a technology I'm working on. Learning is something that I value highly and it makes me more interested in the work when I learn something new that I can apply or know that I'm getting a little bit better.
Link to source? As far as I know for animals only immune system related genetic memory is possible and your example seems to be extremely prone to misinterpretation. Either way, this doesn't say anything about elephants' intelligence.
What do you mean you made them pass but you failed? Do you mean that you coded them for the base cases but forgot about the edge cases? If that's the case, maybe you should spend some time on trying to think through the edge cases in your daily work to understand them better.
It's tough to know what you're asking. Are you asking about how do I improve at algorithms or should I apply again?
Don't let it be "humiliating". A guy I've worked with and know he is good at algorithms and is one of the best developers I've worked with also failed the tests. There will be false positives and the time limit doesn't help as it puts unneeded pressure on you.
I did pass the tests and work through Toptal. For my experience, it has been a good one and worth it. I don't know your location but you say it's been difficult to get remote work lately so it sounds like Toptal would be a good source of leads for you.
Also, work on your attitude. You say "pointless exercises" and "stupid tests". If you think that way, you're definitely not going to do your best on them. Just think of them as something interesting that would be a good challenge. It's only 90 minutes IIRC so if you do retake it it's not like you're out that much time.
Also consider, Toptal tries to filter for just senior engineers. Is your skillset really that of a senior developer? It may be. I'm just putting this out there for something to think about.
Hopefully you use this as an experience to grow and become a better developer instead of just dismissing it.
Pay in BC is low compared to what you'll read about SV here. My first job in Victoria was around $45k but apparently I was lucky to get that as the standard junior level salary was around $36k (this was back in 2007).
If you want to make more money, you'll probably have to move south. If you live in Victoria or Vancouver (I'm guessing Van from your username), the cost of living isn't that much higher in SF but you'll be able to make a lot more.
Vic/Van seem to have a "nice place to live" tax. Companies pay less because people like living there. OTOH, there is less stress and 9-5 usually means that so it's a tradeoff.
When I was teaching English in China, one student got locked out of his apartment. Apparently, the city has authorized locksmiths you can call to open your apartment after proving that it's you. So he called one and was shocked at how quickly the locksmith could open the door.
The locksmith said to him "Locks aren't for people like me. If someone wants to break in, a lock isn't going to stop them. 15% of people will try to steal no matter what you do. 15% will never take anything even if you leave your door while open. Locks are for that 70% in the middle that will steal if the opportunity is right."
Like the commentator said above, get another offer. Obviously you can't get it from this outsourcing site so you'll have to find it somewhere else.
What's the outsourcing site? They're probably billing you out at $100+/hr. They don't want to pay you more because they don't need to. You've stayed for 2 years at that rate. They don't need to "try and squeeze" anything from the client. They are the ones that don't want to pay more.