Interviewers care about DS & Algorithms because a candidate's core competency in programming / coding can be judged through his knowledge of DS & Algo.
For example, a software developer is expected to develop a particular application or a software. Now, when a software is developed, it has an API (Application Programming Interface) embedded in it which allows interaction between different functional requests in the software system. Now, the API holds the internal data structure & also the functional algorithms. If a Software developer does not know DSA or understand the concepts, they will never be able to successfully integrate the software system according to the demand of the situation.
This is the primary reason, why interviewers evaluate the candidate through DS & Algo concepts.
This process of evaluation is mainly followed in product based companies. Why is that? Simply because in product based companies, as a Programmer you will be involved in the development & maintainance of the software products of the company in which you are working, in other words, your parent company, which is why you will notice that in product based companies, the role that the Engineering graduates are hired for is SDE (Software Development Engineer). On the other hand, in service based companies you will be working on the software systems of your clients, & hence the role that you are hired for is Systems Engineer / Associate Software Engineer / Programmer Analyst Trainee.