Absolutely. There was a topic here about a week ago where one commenter in particular personified this line of thought (sorry I don't have a link to the comment).
Paraphrasing, they said that if they very to interview someone they're already working with and know to be a very strong contributor, they'd still subject that person to the technical monkey dance, as you put it, and if they "fail" then they wouldn't be hired.
It blew my mind that anyone can think that way. Clearly the interview hazing culture has become so entrenched that the game of the interview has grown to be an entity to itself. We seem to have forgotten the actual goal is to hire good people.
Personally if I'm hiring someone I've already worked with, I don't do any interview. What would be the point? There is nothing I can learn in 45 minutes that I don't already know from months/years working together. If I called them up from my contact list is because I already know they're capable. All I need to do is describe the role and job and ask if it is a fit for their career goals at the moment.