I never did well in interviews wherein someone asked me to solve a problem while they watch. Too conscious of their presence, I suppose. Give me time to think without someone breathing down my neck and I can demonstrate my aptitude.
So, seems to me a better approach for some candidates is to allow them to do some of the work from home or otherwise unattended. It's a more realistic work scenario anyway.
But, these types of interviews are de rigueur. Am I that unusual in finding this challenging?