> I think the focus on algorithms can be an underhanded way to prefer young, fresh out of school applicants.
This is exactly the thought that came to mind when I started reading this chain, and I'm happy you hit on it. This is definitely part of that elusive ageism that we keep hearing about in SV.
I was one of them; I participated in my school's ACM ICPC [0] teams. Just knowing the algorithms wasn't enough; we had to know what problems they applied to and how to quickly and effectively code them, often with a translation layer for the required inputs and outputs. This was hours of practice every week, and I suspect the top teams are a combination of natural talent and even more practice than I put in.
Even just four years later, I would read through the packet of problems for the year and feel out of practice. I would read problems and recognize that, once I could have coded it within a half hour, but not anymore. I have traded having deep knowledge of problems with the daily practice of "engineering in the real world", and I would not even want to have it another way.
[0] http://icpc.baylor.edu/