That's a good idea but logistically is hard, both requiring the interviewer to spend considerable time on site as well as costing your own employee's time.
It might work well for a small company especially with a small number of candidates but it doesn't really scale, unless you are a really big company (googleish size) that can dedicate so many resources to the interviewing process.
Doing design and research takes time, you can't do it in 30 min, you can't also ask someone to spend 8 hours interviewing, and if you have 10 candidates you can't spend half a man month or more on interviewing them either.
I've seen some companies that "interview" by contracting candidates for 1-3 days of work and paying them for it, but it really only works on positions where you hiring effectively interns/fresh graduates, but as most candidates especially those who end up in the face to face phase are currently employed you can't really do that.