It helps to weed out total slackers, of which there could be non-negligible percent. If you have any shred of decent code - you are ok. If you can't produce a page of decent code after working a year - why would anyone keep such programmer.
Yeah bring code so we can talk about it is fine at the bottom level. Dumb for owner in first week. The good programmers know nothing will ultimately come of this codiscovery process thus making a bad impression on the good employees