That's a false choice. The number of applicants is mostly a function of time, so if 7000 applicants is too overwhelming then just throw out 6900 and focus on evaluating 100 of them. To weed through thousands of candidates is to believe that you can find the one that's exceptional, yet if the position being advertised doesn't need to be filled by a genius then it's strange to scour the earth for the right person. If you are at the point where a genius is needed then hiring through personal connections is probably the better approach.

But if I must write code as an applicant, it better be similar to real world tasks and not some bullshit, especially if my chances of getting hired are still slim. Having to do work in order to get hired is literally sucking the lifeforce out of me, so don't suck even more out of my via the agony of glorified brain teasers.