We are timing the programs as well - with the scalability assessment. Recruiter can change the timing anyway, but we feel that a bit of pressure is good. You don't always have comfy conditions on the job after all.
As for comfy conditions on the job - I would hope that default conditions are comfy. When interviewing I'm more interested in how people will perform day-to-day rather than in rare situations. Most programming jobs don't really require employees to be "cool under pressure."
Other than that, good job on the execution so far. Reminds me a lot of TopCoder, just applied to a specific niche in a good way. I would even consider using this or recommending it to colleagues for hiring.
Consider making the clock like on http://www.sudokuslam.com/ - with an icon right next to it to show or hide it.