Note that this does not necessarily imply these people are useless in real-life tasks. It just means they are bad at passing exams.
This is why I would never get through Google's interviewing process. Some companies (like Google) just accept the fact they will throw away some possibly good candidates because of the nature of the selection process — and that's fine, as long as you realize that.
Note that I'm talking about solving problems involving abstract thinking next to a whiteboard here. The part about people not knowing the difference between cooperative and preemptive multitasking is something I fully agree with — people who do not know that should not seek a job at a company that deals with anything low-level.