I get that the response to this will be "they make $INFINITY as-is", but yes, I'd be willing to argue that they should reverse that. My basic argument would look something like:
A) Writing algos on a whiteboard is not the be-all end-all of actual programming
B) The skill set of "can identify things that people want and need and actually implement them" is a useful one that the person who created one of the most widely used pieces of OSS out there has demonstrated they have.
C) There's no evidence that I know of that indicates that whiteboard algo writing correlates with the skill set identified in B, and a fair amount of anecdotal evidence that suggests they aren't correlated. (And there are a range of other skills that are useful for an engineer or someone leading teams of engineers that are similarly not correlated with whiteboard algo writing.)
D) Firms benefit from diversity. Gender-diverse and ethnically-diverse companies are more likely to out-perform less diverse companies.[1] I don't have specific evidence for it, but I suspect that a firm that has a hiring process that brings in people with multiple diverse skill sets will eventually perform better than a firm that only brings in employees with tightly focused, highly similar skill sets.
And to respond to the "well, FB/Amazon/Google make $INFINITY as-is, so nyah-nyah", I would say that those companies are in market-dominant positions now that may make their math on hiring a diverse array of skill sets different from a theoretical firm, but I also suspect that maintaining those dominant positions will be more difficult with an engineering corps that is solely selected on a narrow band of proficiencies.
So, I'm not necessarily saying that Google should change their policy (although I do feel comfortable saying that any company that isn't in that rarified air that decides to copy that policy is making a serious mistake), but I think there's a pretty solid case for why they should at least acknowledge that there are people for whom they should make exceptions and possibly completely reverse that policy and overhaul their hiring process to achieve a broader range of skills among their engineers.
[1]: https://www.mckinsey.com/business-functions/organization/our...