Like with other aspects of hiring (IQ Tests, Programming Tests, Writing Tests, Interviews, GPA's, Uni Results) they should be a facet in making the final decision.
The way I see it there are two main ways to use someone's Stack Exchange reputation.
First just using the fact that they have an account and reputation, in finding out how involved and engaged they are with the community.
Secondly drilling down into the questions they've asked, and the answers provided to get a better understanding of someone's strengths and weaknesses, and seeing where their expertise lies.
Also at the end if there's no other way to make a decision between two people, one can just take the person with the higher reputation score.
Lots of short, google-able answers to trivial questions will get you much more points than thoughtful answers to hard questions.
SO can be useful for preliminary screening, but only if you look at the actual answers.