I think the key is that there are crappy puzzles (and coding a blog system is not a "puzzle") and there are decent puzzles. I've been giving applicants a simple word search puzzle for over five years and it has been great at differentiating candidates.
The biggest plus for me as the hiring manager is that it allows me to be much more confident in taking flyers on people without that picture perfect resume.
I can certainly understand that. I've definitely taken care to make sure that all of our examples couldn't be construed as free work. Code katas, like the bowling kata, are good for this.
The biggest plus for me as the hiring manager is that it allows me to be much more confident in taking flyers on people without that picture perfect resume.