In my science field we do not use either 1. conference interviews or 2. phone interviews. We evaluate candidates on paper, select, say, the top 5, and bring them in for interviews. This works just fine. Surely it costs no more than the department paying for a troup of faculty to visit a conference for several days.
I don't think this would be good in Humanities. Too much depends on personality, sociability, interaction. Not that I'm saying the sciences are bereft of of those things.
I liked the earlier idea about splitting costs. Think less interviews would be offered in that case, though?