I think most of the dislike comes from the tendency of typical whiteboard questions to favor someone who happens to have seen a very similar problem recently, the same way someone who comes up with the correct answer to a brain teaser very quickly is usually someone who's seen it before. Many rely on that, in fact, since otherwise they'd be asking people to come up with a publishable (once published, perhaps) finding, under pressure, on the spot, in maybe an hour.

This might be fine if the "very similar problem" is something you'd likely have encountered in your work, but often they questions are drawn from a pool that most people in this line of work see rarely if at all, and if they do it's likely to be some very small subset of the questions, so dedicated study of the remainder of the pool still puts one at a large advantage, regardless how useful it is in doing your actual work.

They're measures of "how bad you want it" (how much of your time you spent memorizing stuff you don't actually use to prep for the interviews) and/or how recently you took an algorithms course. And maybe those are things worth measuring, I dunno. Maybe the absence of strong enough signals on either of those is important enough that it makes sense to use them to reject people who are otherwise very capable of doing the actual work.