This might be a viable strategy for people who have a well-established career/credentials/references (etc), but for junior-level candidates still trying to prove themselves (such as myself) I can't see this working out too well.
To me, it's absolutely ridiculous to expect to hire a junior developer and have them come with a fully-developed set of skills. If they do, that's great. But if you're hiring someone fresh out of school, you've got to be approaching it as hiring someone that you're going to train and mentor. For me, the number one thing I look for in a junior developer is the ability to learn.
Here's an example from early in my own career. I was just finishing up my 3rd year of a combined CS/EE program, and looking for a summer job. I got in touch with a biology lab that needed a developer for the summer to build some (very cool) software to support the neurophysiology experiments they were doing. I looked at the job requirements and thought "well, I don't know most of this stuff, but I'm sure I could pick it up."
The interview progressed like this:
> Do you know Python?
I'd heard about it, but have no real experience with it. I downloaded it last week and started playing with it though, and it doesn't seem too different than other languages I've used.
> How about VisionEgg (neurophysiology module for Python)?
Well, I downloaded it at the same time I downloaded Python. I've managed to get a window to open up, and I'm displaying a square that's got a cool animated habituation pattern on it. (Note: 1 week prior, I had no idea what a habituation pattern was) I do have a bit of OpenGL experience from a class I took, and that's the underlying library that VisionEgg uses.
> Well, so far, you're the only applicant who has actually made an effort to look at the specific tools we're using here. I've got one other applicant coming this afternoon, but unless they somehow have more experience with these tools than you do, the job is yours.
It turned out to be a great experience, and they hired me back on the following summer. I went from being a total Python noob to contributing patches back into VisionEgg. I think most junior positions should probably progress like that. Give me a keen junior developer, and let me shape and mould them into a not-junior developer.
The flip side to this: if you're expecting the person to be productive on day 1 or 2, you'd better be hiring someone with experience. Whether or not they have code they can show you, they should be more than capable of going into serious detail about past projects they've worked on (within the confines of NDAs and such, of course).