I like this idea for small firms, but how does this scale to the level that the parent comment is asking about? If we want to interview a few hundred candidates this month, who finds the few hundred open-source project tasks and audits them for appropriateness?

And, for what it's worth, the peg game problem sounds to me like standard interview fare: an interesting puzzle that bears little resemblance to real-world software challenges. Why is it a better alternative?