While it may be okay for small companies with high-end employees to allow developers to interview, corporations should not let people interview prospective peers. Unless they are very confident in themselves, there will be a tendency to prefer poor quality co-workers, for competitive reasons.

1. This doesn't sound like a great idea from the point of view of the person being interviewed. I would certainly want to know what my prospective peers will be like.

2. A manager that didn't allow his/her engineers to interview candidates would have to tread carefully to avoid making engineers feel that their judgement isn't trusted.

3. Self confidence probably has little to do with one's ability to judge the quality of a candidate. Technical proficiency, humility, preparation, and being a good listener seem like characteristics that would rank higher.

I've never seen anything like this. Usually when we hire people we have more work than people; new hires never jeopardize old timers. Also working with smart people is a lot more fun and when they leave you get a smart friend who may already work in a better place.