See this post on TaxProf Blog (here). I agree with the idea that law students should have plenty of options when it comes to finding jobs, but this system seems to me to undercut the employers' ability to find the diamonds in the rough.
I'm going to bet that every employer that subscribes is going to want "top 10%, Law Review, judicial clerkship" folks. Those folks don't need a huge amount of help finding jobs--and I think that focusing only on these criteria is causing just that type of mismatch between employer and employee that triggers the attrition in BigLaw associate classes. These criteria are some indication of talent, but they don't--in and of themselves--indicate a candidate's other necessary abilities for success. (Well, Law Review, at least, indicates that the candidate can probably research and write well and can work well in a team environment.)
Cutting out the interview stage only makes sense when employers are only asking about "top 10%-ish" information and not asking about those qualities that will lead to success in their particular business environment. What employers should do instead is figure out what attributes they really need and focus their interviews to learn if a candidate has those attributes in abundance.