Wasn't this in reaction to the story that Homeland Security had asked the question to a programmer entering the US? I don't know how this was extrapolated to a broken job interview process.
I'm sure there are other examples predating it, but the following I believe is the 1st account of a Google interview gone bad for someone who very likely didn't deserve to get kicked in the butt (Max Howell, author of Homebrew for MacOS). https://twitter.com/mxcl/status/608682016205344768
But well, I only had one strange interview where I had to programm Tetris and failed. In most interviews I just got asked, if I could do the job...
There have been others come to light since, but this was two weeks ago.