I'm not sure why there is such extreme hate for the whiteboard. Yes it has plenty of caveats when it comes to actual coding and recruiters should not expect any candidate to write precise code on that medium.
I do use the whiteboard for trivial CS questions limited to 5-10 minutes. Think fizzbuzz and string reversal. Candidates have the option to use my laptop (not ideal because the keyboard has a US layout) but they are welcome to use their own computer as well (if they thought about bringing it). It weeds out candidates who can't even produce basic code. And yes, a candidate with 2+ years of experience should be able to write a basic function on a whiteboard, a napkin, or whatever. If not, the interview is not lost but the candidate will have to prove his skills another way.
For most candidates, we also give a longer technical test which is to be done at home and takes 2 to 4 hours to complete. Candidates are given as many days as they want to complete it.
Whiteboard is an excellent medium however when discussing architecture and higher level ideas. It's also a tool that I've used during day to day activities with colleagues. Software based tools don't come even close.