That's just it. They are willing to lose the occasional great hire in order to avoid the risk of a bad hire.
But the silly thing it, the convoluted interviews don't avoid the risk of a bad hire because they test for the wrong things.
The analogy I use is that it's like a hospital trying to hire a heart surgeon by extensively grilling candidates on trick questions about organic chemistry. I mean sure, the surgeons probably took that class a few decades ago prior to medical school. So they end up with surgeons that are wizards in organic chemistry but might well not know how to use a scalpel or know where the heart is.
And the OP's own point "responsibility is diluted so if there's a bad hire you can blame the process rather than one manager" would be needless if the process actually did avoid bad hires.
So does that actually reduce bad hires (or increase good to excellent hires)? Probably not, but that's not really the purpose of all this theatre. The purpose is that if there's a bad hire, do I, personally, get the blame?