The problem with modern hiring practices is that they're throwing the baby out with the bathwater. Hiring based on past experience is biased and often can lead to either subpar candidates (lemons) or overpaying. You're either left with the people who didn't succeed at their previous job (but are good talkers) or people who have a brand name college/company but aren't really exceptional. On the other hand, trying to completely ignore past experience means you're left asking questions completely unrelated to real world work.

A combination of all three.