It simply selects for people who can write a simple code unaided in an interview situation while somebody is watching every letter you type. Many people don't have a problem with that, others have.
"The companies and teams listed here instead use interview techniques and questions that resemble day-to-day work – for example pairing on a real world problems"
I would contend that if you're doing pair programming with a candidate, you're looking at people writing code in an interview situation while somebody is watching every letter you type.
In fact, I think hacking on actual code is worse than whiteboarding: everyone knows how to use a pen and board, but don't do so frequently. Different candidates being placed in front of the same computer and IDE, however, may be vastly more comfortable or not - they may know the bindings, etc. If they're not the "driver" in the pair, they still have to grok the codebase and the problem quickly.
Whiteboards may be abstract, and people may focus too much on algorithms with them. I don't think that there is much fundamentally different about pairing, and I would have more reservations with pairing personally.