90% of programming is problem solving. Knowing how to solve a problem is much more useful than being able to spout out the right answer.
(To echo the first poster. Number of times in 20 years outside of a job interview I've had to implement a Linked List: 0)
IMHO Google, Facebook et al are largely the cause of the current recruiting mess because companies who don't understand what makes a good employee for their company have been cargo-culting Google, Facebook et al in the hope that will "make it rain" for them.