While I agree that the process is broken, a solid understanding of algorithms and data structures is very important for developers at my company. And nobody knows all, or even most of the algos or data structures! But we do have large amounts of data and some pretty complex analytic problems, and a poor design can cost a lot of time and AWS $. Likewise over-engineering something small is a waste of time not just in writing but maintaining it.
I agree that most e-commerce or business web developent probably don't need this level of formal skill.
Whiteboard questions are useful, but not for figuring out trick questions. Instead for figuring out how the candidate approaches problems.