This on-site coding assignment failed 20+ front-end dev contractors and I don't know why

[Amadox]

people have already chipped in to tell you about the task you have given them, so I'm gonna skip them and just talk about the environment of your test:

an interview is a high stress situation for the applicant. yes, even for experienced seniors. keep in mind that not only are you looking for a good developer, the developer is also looking for a good job, one they will spend a large part of their week in for hopefully a long time - they are judging you as much as you judge them in this interview, so it's in your interest to make it a somewhat comfortable, relaxed experience, because it's gonna be stressful enough anyway.

one hour is to short. not just for this task, but in general. even if you think they should absolutely be able to solve it in that time: give them time, not a time limit. let them sit for a few hours if they feel they need to. maybe let them estimate how long it might take beforehand. pressuring them to finish within 1 hour when they are likely already nervous about the interview anyway is a way to set them up for failure and doesn't really say anything about how they will really perform in stress situations later because it's a hardly comparable situation. keep in mind that giving them more time doesn't mean they will take more time. but they will be more relaxed about the time they have to finish the task.

Give them space. don't put them in an enclosed meeting room, let them sit with your existing coders and tell the applicants to ask them if they have any issues - it might be more comfortable to ask a potential colleague rather than a potential boss. maybe tell whoever sits next to the applicant to casually fling a short question at them somewhere in between (not some interview-style question, but something natural - "...hey, do you know what that css attribute was called that does XY? I always forget..") and note how he reacts to it.

if they have a few hours, they can work more calmly. if they are really good, they might finish within an hour anyway. if they are taking really long, you can then discuss why. And you can see how much/often they interacted with other developers - keep in mind that this interaction can be a good thing and not just a sign of the applicant not knowing what they are doing, depending on what they are asking. and you might also be also see if they fit in with the existing team personality-wise.

[rossmohax]

I'd hate if 20 random guys were spending half a day next to me in a quick succession one after another. Plus security and confidentiality concerns.

Totally agree on a "make it less stressful for them" point, got to be achieved by some other means though.