You do NOT need to know how to write a sort algorithm in order to be a great developer.
Just like you don't need to know processor architecture to design a website.
Encouraging beginners to study implementations of sort algorithms is a waste of time because they've got no context for it. They should write tons of really bad code first, like we all did. Then they'll get better and maybe some of that is studying the work of masters (depending on their learning style).
a great developer absolutely must know how to write a sorting algorithm, or three, and has to have a good idea how to start writing another five. great developers are building the infrastructure that good developers use to solve business problems. (not that great developers aren't doing that, too.)
There are great developers scattered in all sorts of roles in the community. Not just building infrastructure or contributing to open source projects.
Besides, how many people need to write sorting algorithms before we say "enough! We know how to sort things now!"? I'd say that point was about 5 years ago. I think we can move on to other challenges now, eh?
This doesn't even cover security issues such as side-channel timing or entropy attacks (hard to believe?) or handling of denormal numbers (which will reduce your processing speed by upto 100x). Ever heard of using Fast Fourier Transform to achieve asymptotically faster sorting under certain conditions? All of the above have practical applications.
As you yourself said, there are interesting challenges in all communities. Let's not be dismissive of the algorithm design community.
And yes, developers need to know the fundamentals. And algorithms are one of them.
We are living in an age where we have hundreds of languages and tens of thousands of frameworks and libraries.
The only way to become pro-efficient with all of these if you know the basics and know it well.
We are past the times where you learned one or two languages in school and at home and was enough to land a decent job. No it's the time for the 'Jack of all Trades'.
And please don't write tons of bad code. We already have tons of it in legacy systems and loads of libraries around the world.
If we are talking "great _Wordpress_ developer", maybe.