I've now run three tech companies and hired dozens of developers by having really intense, thoughtful conversations with them. I asked them to tell me war stories and encouraged them to share insights on how they solve problems.
I only rarely look at code, because it's self-evident when you're talking to someone that is passionate about programming + intellectually curious-to-hungry + an interesting person who demonstrates empathy and seems like someone you'd want to spend 7-9 hours a day with.
I hire like I'm trying to form a rock band: I don't tell them what to play, I give them permission to show me what they've got.
Here's the thing: the more we, as a class of developers, put up with these devolving interview processes, convince ourselves that this is somehow our failing and our inability to FizzBuzz in six languages with a sharpie and people watching... the more we allow it to be considered okay, and the more normal it will be to expect this nonsense.
I know that being cash-starved sucks, but you know what? If you walk into an interview and they bust out the markers and ask you to start sorting, I sincerely hope that we can collectively find the strength to laugh at them and politely tell them that you'd never waste your time at a company that insults your craft.
Find your pride and tell them why they missed out. If they want to understand what just happened, tell them to take you for a drink. If they are dicks about it, you really didn't miss out on a damn thing. I promise you that.