Contracting out interviewing is nuts. IDK how a company can think that the level of validation you get in a coding interview is necessary and also think that it can be outsourced to someone else. They seem completely at odds with each other. I assume they're just cargo culting what other companies do though.
I don't think memorizing trivia is a useful signal for a job, which is what a lot of "domain expertise" looks like in interviews. If you're going to write software and solve problems for a job then you should be able to sit down and solve some medium difficulty coding problems. It's not that hard. Personally I'd much rather do that than a take-home coding assignment.
The number of people out there working as engineers who can't write basic code is too high to not check.