I agree that the preference (or demand in this case) should have been communicated upfront. The interviewee should have known well in advance how the interview would be conducted. Waiting until the actual interview just ended up wasting everyone's time for no reason.

Though, honestly, you're stuck between a rock and a hard place here. One of the tenants of interviewing is that candidates have to be evaluated fairly and equally - you can't have one candidate go through one evaluation process and another go through something completely different. As a company, you could easily be sued for this (you could be seen as showing preference to one candidate or the other).

I think the biggest issue is that companies like FB and Google and other tech giants use these interview techniques, so all other companies argue that those techniques "work" for (or at least do not hinder) companies that have literally billions of users and billions of dollars (in other words, you can't argue with the results).

So, until we have solid proof of a better process that scales I think those types of interviews are going to be a consistent part of the tech job industry.