Clearly some people can do that, since Google hires thousands of people every year. Why shouldn't they be hired over you?
i just think its annoying because lots of companies cargo cult google and what thet do is a largely tangential skill set from the rigors of day to day programming work and knowledge. its a ritual from when they were hiring small numbers of graduate students with no real programming experience to measure them on. also the whiteboard is a relic of a time before there were laptops with hotswap 2nd screens.
It's going away now but it kinda was not too long ago.