I've done a lot of interviewing as a relatively low level engineer and its an expensive process in general for a company. Per each candidate you're looking at a few hours per engineer, times how many people are on the interview. It ends up costing the company a few thousand just to talk to a candidate over the course of the processes.

If you're a company looking for 5 good employees, you're going to spend a lot of money interviewing all the people that don't make the cut, grabbing someone internally or by reference is far cheaper. It's sorta a gamble when moving on with an interviewee. You basically need to make a low information gamble based on a cheaper short screening, to see if its worth the time for a full interview.

I don't really support no-interview hires unless they previously worked in that position, left, and came back though.